LeEco’s financial position deteriorates; forced to sell US office real estate for cash

LeEco, the Chinese electronics startup that grew from a Netflix-like Video website to a business empire spanning consumer electronics to cars, is facing a touch financial ride currently. The startup recently retrenched most of its employees in India, and is facing an imminent shut down of its operations in the country. The condition is not much different globally too. Cash-strapped and struggling to repay a pile of debts to suppliers and business partners, the company plans to sell its 49-acre US Silicon Valley property, less than a year after buying it from Yahoo Inc., to little-known Chinese developer Genzon Group for $260 million, $10 million more than what the firm paid for it in June’16.

In line with its downsizing strategy in India, the firm also confirmed that it has downsized its operations across US with some estimating numbers had at least halved in its current Silicon Valley office alone. Although the company’s founder was sanguine that it would come out of troubles after it received a much needed capital injection of $2.2 billion from property developer Sunac China Holdings, but the Sunac investment was only for LeEco’s entertainment units and not its car-making business in the US which is a high capital intensive industry.