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[BEIJING] Leshi Internet Information & Technology Co, the Chinese video-streaming service backed by the billionaire founder of cash-strapped online giant LeEco, said it's in discussions to raise more than 10 billion yuan (S$2.08 billion) from a group of undisclosed strategic investors.
The company sometimes described as a local Netflix plans to raise the money through a private issuance of stock and other avenues, it said in a filing with the Shenzhen stock exchange Wednesday. Shares in the company, which were halted this month, will remain suspended during negotiations but should resume trading within 10 days, it added.
Leshi's share price has dropped over 36 per cent in the past year and fallen about 8 per cent since LeEco founder Jia Yueting said his technology empire faced a cash crunch after having expanded too quickly into new markets and products, from electric cars and smartphones to televisions. Suppliers across different divisions have also said parts of the LeEco business have been late in paying their bills.
At a Beijing technology industry conference this month, Jia flagged a new round of fund-raising he said would largely end his financing woes. In its Wednesday filing, Leshi said key details including the terms of an investment agreement, scope of cooperation and price of shares to be issued were still under negotiation between Jia and his strategic partners.
"Leshi Internet, Jia Yueting and Leshi Holdings (Beijing) signed a strategic cooperation framework agreement with investors," the listed company said in its statement. "The transaction size is expected to be more than 10 billion yuan." Jia's LeEco is the umbrella holding company for a sprawling family of businesses that includes sports media, automobiles and consumer electronics. The company has aggressively pursued funding and placed bets on new ventures from an electric car plant in Nevada to a US$2 billion acquisition of California TV maker Vizio Inc. Jia is a major shareholder in listed Leshi, a key part of the sprawling LeEco empire.