Le Eco, the Chinese technology and entertainment group that this month signaled liquidity problems, says that it has now raised $600 million of fresh capital.
The company announced the news in an internal memo to staff. It did not provide full details of the funds, but said that some had come from the business school classmates of group co-founder Jia Yueting and others from corporations including Chengxin Green Integration and China Heilan Group.
Half of the new finance is expected to arrive this month and be directed towards Le Eco Global and its nascent electric car-making operations.
It announced the appointment of Anthony Gao, who previously headed the group’s virtual reality unit, as president of Asia Pacific and CEO of its Hong Kong business. He replaces Mok Chiu-tin with immediate effect. Before joining Le Eco, Gao spent 17 years as an executive at telecoms equipment giant Huawei.
Gao’s mission will be to improve profitability within the existing Asian businesses. The group expects to put a temporary hold on further expansion of its businesses in China and parts of Asia.
It has made headlong expansions into phones, smart TVs, VR and electric car technology as well as multiple investments into Hollywood movie making, to enrich its ecosystem. And it has expanded outside mainland China, notably to Hong Kong and India.
Two weeks ago Jia admitted that too much emphasis had been put on growth and not enough on cash generation and profitability. As a symbol of his willingness to join the retrenchment, Jia announced that he would cut his salary to a token $0.15 (RMB1) per month.
(Disclaimer: LeEco is the principal financier of Faraday Future, a powertrain supplier to the Dragon Racing team that is owned by Jay Penske, head of Variety’s parent company Penske Media Corporation.)