The shares of LeShi Internet & Information Technology will resume trading on the Shenzhen stock market on Wednesday, some seven months after they were suspended.
The unit is one of the listed parts of the struggling LeEco empire, and commentators expect the group’s problems to continue – and the LeShi stock to fall.
Revenues in the first nine months of the year were down 63% to $960 million (RMB6.15 billion) and net losses deepened to $355 million (RMB2.28 billion). In a filing the company confirmed that it will register a full year loss.
The company also warned that management controls, and limited financial resources are weighing on the company. Accumulated debt totals $1.18 billion ($7.53 billion,) the company revealed. More than RMB2.58 billion is owed to the company by other parts of the LeEco empire controlled by founder Jia Yueting.
On Friday last week, LeShi said that it would not be able to go ahead with the takeover of the LeVision Pictures, film making and distribution, that it had previously planned to absorb.
Jia has disobeyed a regulatory order to return to China to sort out the group’s mess, preferring instead to stay in the U.S. and sort out the financial problems of his electric car company Faraday Future. Jia’s wife, Gan Wei returned to China shortly before New Year and, with Jia’s brother, has been put in charge of the rebuilding effort.
Gan reported last week that $103 million of a loan provided by China Merchants Bank had now been repaid. She said that she would ask for some of LeEco’s frozen assets now to be released. The company has now sold of its stake in phone maker and contractor, the Hong Kong-listed Coolpad. It had been the largest shareholder.
State-controlled newspaper, China Daily said that investors who have waited many months to be able to trade their shares will do so after the listing resumes. Many will head for the exit. The paper also warned that after two consecutive years of losses, LeSho could anyway be stripped of its share quote.