After its founder filed for personal bankruptcy in the US just last week, Chinese tech startup LeEco has seen its Beijing headquarters put up for sale by the capital’s courts after the electronics-to-video streaming group failed to make payment on an overdue loan.
The Beijing No 3 Intermediate People’s Court has put LeEco’s 14-storey office block in Beijing’s Chaoyang district up for sale at an auction reserve price of RMB 678 million, according to a public listing on a distressed asset site managed by e-commerce giant JD.com.
The auction is being held after LeEco, which was led by Jia Yueting until the tech entrepreneur fled to the US in 2017, had pledged the building as collateral on a RMB 1.4 billion loan in 2016 — a credit obligation which the company has yet to fulfill.
Asset Auctioned to Repay Loan
The 19,600 square metre (210,972 square foot) commercial block is located at 105 Yaojiayuan Road in Beijing, about 2.5 kilometres from Chaoyang Park, near the east Fourth Ring Road.
LeEco had offered the office asset in return for a two-year loan at 8 percent interest from asset management company Zhejiang Zhongtai Chaungzhan. With LeEco having failed to meet its obligations to the lender, the court has arranged the online auction, with the first round of the process having been held last Friday.
The property, which LeEco had purchased from state-backed Badachu Holding Group in 2014 and subsequently renamed as Beijing LeEco Tower, is valued at RMB 969 million, according to the online listing.
Le Eco’s History of Futility
Since Jia was added to a national debtors blacklist in China in December 2017, the Beijing building has been the subject of sale rumours, even after it was renamed as the Lerong Tower following Sunac China’s investment in LeEco in 2018. Unhappy creditors also have held protests outside the building even after Jia, who was once portrayed as China’s Steve Jobs, have headed stateside to avoid bill collectors.
In December last year, LeEco also tried to put t0 put Beijing Shimao Gongsan Plaza, a 50,000 square metre shopping centre in the capital’s Sanlitun area up for auction at a reserve price of RMB 2.3 billion. Over 40,000 people logged in to witness that online sale on Taobao.com, according to local media accounts, however, the auction ultimately passed without a bid.
Jia Yueting, who turned to electric cars through his stake in California-based Faraday Future after his mainland business collapsed, filed for bankruptcy in the US last week with the terms of that move including his surrender of his stake in the high end automaker. In filing for protection from his creditors, Jia said that he still owes around $3.6 billion to individuals and companies, due primarily to the collapse of Le Eco.