UPDATE:
LeEco reached out with the following statement:
“We’ve always envisioned EcoCity would be an open environment that would be a place for our employees, our partners and the community to collaborate. LeEco has been working to identify additional investors as well as a development partner but we have nothing to announce at this time.”
End of update
LeEco wants to sell a Silicon Valley property it bought from Yahoo for $250 million last June, sources with knowledge of the matter told Reuters. The Chinese tech giant is reportedly strapped for cash following its aggressive expansion efforts that are yet to pay off as the company currently owes significant sums to both partners and suppliers. The 49-acre property in Silicon Valley is reportedly going to be sold to Chinese developer Genzon Group for $260 million. Genzon Group confirmed it’s negotiating a potential purchase but has yet to elaborate on why it’s interested in the land. The company’s website reveals it’s currently in the process of planning a project it refers to as Burlingame Point that entails a massive office building in Silicon Valley, which might explain its willingness to buy the property from the struggling Chinese conglomerate. LeEco initially planned to use the land as the site for its U.S. headquarters that were supposed to house 12,000 employees. The Chines tech giant told Reuters that the fate of its U.S. property still hasn’t been decided.
This latest report is yet another indication of LeEco’s financial woes that have been troubling the company in recent times. The conglomerate’s Indian branch recently announced massive layoffs and halted all expansion as its global operations continue to suffer due to a cash crunch. LeEco’s founder and Chief Executive Officer Jia Yueting said in January that all of the company’s financial troubles will be resolved in four months or less. Since then, the Chinese consumer electronics manufacturer managed to secure a $2.2 billion financial injection from Sunac China Holdings but is apparently still in need of additional capital.
LeEco has been expanding and diversifying its portfolio in a rather aggressive manner in recent years and that strategy led the company to invest in luxury electric vehicles that it’s developing with Faraday Future, a U.S. startup backed and controlled by Jia. However, LeEco’s financial issues also reflected on Faraday Future that’s reportedly close to going bankrupt and has yet to launch a commercial vehicle. The aforementioned investment from Sunac China Holdings was aimed exclusively at LeEco’s entertainment division, meaning the company cannot use it to pick up its equally struggling car business. It remains to be seen whether LeEco will use the sale of its Silicon Valley property to save its vehicle manufacturing operations, but an update on the situation will likely follow soon.