LeEco receives 16.8bn strategic investment
LeEco, a leading Internet and technology firm from China, has successfully earned 16.8 billion RMB strategic investment, Leshi Internet Information & Technology announced.
According to a press statement from LeEco, 15 billion RMB investment came from Sunac China Holdings and 1.8 billion from Le Ran Investment and Hua Insurance.
In the arrangement, the listed company and its holding subsidiaries will receive 7.1 billion RMB fund. The investing party will deliver 6.041 billion RMB out of the total transaction volume within 5 business days. The two parties will hold a collaboration news conference on the 15th of this month in Beijing.
Sunac China has injected abundant capital into LeEco’s listed company and the entire Le Ecosystem.
The statement said YT Jia will carry out equity trading with Tianjin Jiarui, transferring 170 million shares of equity that he holds at the price of 6.041 billion RMB (35.39 RMB per share). The amount of equity transferred accounts for 8.61% of the total share capital of the listed company. Tianjin Jiarui will become the second largest shareholder of Leshi Internet Information & Technology.
Firstly, in the previous round of financing, two investors were attracted - Le Ran Investment and Hua Insurance - investing 1.43 billion and 400 million RMB, purchasing Le Shi Zhi Xin's 12.63 and 3.53 million newly registered capital fund, respectively.
Secondly, Tianjin Jiarui will make strategic investment in Le Shi Zhi Xin, divided into two components - transferring of existing shares and purchasing of newly registered capital.
For the existing shares: Tianjin Jiarui will be transferred 44.17 and 29.23 million RMB of Le Shi Zhi Xin’s registered capital funds previously held by Xinle Assets and Leshi Internet Information & Technology, at the price of 2.648 billion and 2.302 billion RMB, respectively; In this arrangement, Xinle Assets will obtain the portion of Le Shi Zhi Xin’s shares that are held by Le Holdings (Beijing) through flat trade and other reasonable methods, continuing employee stock ownership.
For the new shares: Tianjin Jiarui will increase Le Shi Zhi Xin’s capital by 3 billion RMB. After the transaction, Leshi Internet Information & Technology will hold 40.31% of Le Shi Zhi Xin’s shares, still the controlling shareholder. Jia Rui Zhi Xin will hold 33.50%, becoming the second largest shareholder.
The arrangement also includes Le Vision Pictures’ shares held by Le Holdings (Beijing). Specifically, Tianjin Jiarui will be transferred 126 million RMB Le Vision Pictures’ registered capital held by Le Holdings (Beijing), 15% of Le Vision Pictures’ total registered capital, at the price of roughly 1.05 billion RMB. At the same time, Leshi Internet Information & Technology will continue with the major recapitalization project of acquiring Le Vision Pictures.
Sunac will continuously provide LeEco with capital, and in the future as LeEco's second biggest shareholder, Sunac's strong capital ability will act as a guarantee for LeEco's continued development, the press statement added.
At the same time, both parties have established long-term strategic cooperative relations, which will be launched in several areas including equity, business, and capital markets. Business cooperation includes, but is not limited to, smart hardware, internet + real estate, internet eco-towns including auto eco-towns and film/TV theme parks, smart homes, and smart communities, etc.
In addition, Sunac also possesses LeEco's priority investment rights, which means that if LeEco uses any forms of equity disposal such as debt-to-equity swap, increases the amount of registered capital or issues new shares, Jia Rui Hui Xin will have priority rights for purchase.
In recent years, LeEco has used strategic, organizational, and product innovations to complete the construction of its ecosystem.
As of June 30 2016, Sunac China Holdings’ total assets amounted to 154.572 billion RMB; and as of the end of October, 2016, sales were up to 108.03 billion RMB. This puts Sunac at number 7 among real estate companies nationwide, as well as the Top 10 real estate companies with the most potential across the country.
LeEco, formerly known as Letv, is a global pioneering internet and technology company with multiple internet-based ecosystems across content, devices, applications and platforms. Founded in November 2004 by YT Jia and Hank Liu Hong, LeEco employs more than 15,000 people across the world and is the world’s first video company to go public with a market capitalization of more than $11 billion USD.
