Hong Kong-based electronics firm Truly Electronics has acquired a 2.3 per cent stake in LeEco Zhixin Electronic Technology, a smart TV unit of Beijing-based technology company LeEco.
The financially challenged LeEco sold the capital stock while seeking to modify operations as well as expansion, reports the China Money Network. The latest investment, which values LeEco Zhixin at $4 billion, will be made before April in three instalments.
After the deal, LeEco will still be Zhixin’s biggest shareholder with a 39.4 per cent stake. Truly Electronics, which will be the fifth biggest shareholder, is an electronics component manufacturer in Guangdong province under Truly International Holdings.
Zhixin had $70 million in assets and $29 million in negative net assets at the end of 2015. The same year it had sales of $1.25 billion and a net loss of $106 million.
LeEco last month raised $2.18 billion from property developer Sunac China Holdings, which also paid $140 million for a 15 per cent stake in LeEco’s film production unit Le Vision Pictures, and another $1.16 billion for a 33.5 per cent stake in Zhixin via Jiarui Huixin. Sunac’s shareholding in Zhixin is now diluted to 32 per cent.
LeEco last year sold a 1.13 per cent interest in Zhixin to Chinese insurer Huaxia Life for $58 million, whose shareholding will be diluted to 1.1 per cent. LeEco had several fundraising rounds last year. In September, it raised $1.08 billion through its electric car affiliate LeSee from investors including Lenovo. In November, about a dozen former Cheung Kong Graduate School of Business classmates of LeEco founder Jia Yueting invested $600 million in the company.