At LeEco's funeral, the institutions and big investors who may be "buried with it"

Before one wave subsides, another wave rises.

LeTV’s debt crisis is spreading from the supply chain to the capital market.

The incident that was exposed on July 3rd, in which the assets of Jia Yueting and his wife and three LeTV-related companies totaling 1.237 billion yuan were frozen by the court, seems to be just the beginning.

Just one day later, new news came out: On the evening of July 4, according to an announcement from LeTV (SZ: 300104), the 519 million shares of listed companies held by Jia Yueting were frozen by the court again for a period of three years from the date of freezing.

It can be seen that the financial crisis of LeTV is beyond imagination.

Those who have been swallowed up in the "black hole" of LeTV's tens of billions of dollars in debt are spread across the primary and secondary markets - including banks, a number of funds, well-known individual investors, and even Jia Yueting's "good classmates in China"... There are all kinds of people, too numerous to mention.

1. Banks

As the trigger point of this capital-side debt crisis, China Merchants Bank requested the court to conduct litigation preservation at the end of June and froze a total of three LeTV companies, namely: LeTV Mobile Hong Kong Co., Ltd., LeTV Mobile Intelligent Information Technology (Beijing) Co., Ltd., and LeTV Holdings (Beijing) Co., Ltd.

It is reported that China Merchants Bank filed a lawsuit against LeEco because the domestic guarantees and foreign loans involved in the Coolpad acquisition case had become overdue.

It is intriguing that the above three companies, together with the assets of Jia Yueting and his wife, have become the targets of China Merchants Bank.

Among the three companies, LeFeng Mobile and LeEco Mobile are parent and subsidiary companies, with the former registered in Hong Kong; while LeEco Holdings is one of the top ten shareholders of the listed company LeTV.

Among them, Lefeng Mobile (the sole controlling shareholder of LeTV Mobile) has a relatively simple shareholder structure and is composed of members of Jia Yueting's family.

In the equity structure of LeEco Holdings, in addition to the shareholders Jia Yuefang and Jia Yueting, Huixin Asset Management (Tianjin) Partnership (Limited Partnership) and Chenxi Asset Management (Tianjin) Partnership (Limited Partnership) are the other two shareholders.

The actual controllers of these two corporate shareholder companies may also belong to Jia Yueting's family. Jia Yuefang is not only a shareholder of both companies, but also holds 80% of the latter's shares.

If this is the case, it is not difficult to judge that the above three companies are the main platforms for carrying Jia Yueting's family assets.

According to media reports, LeTV's current creditor is not only China Merchants Bank, but also Ping An Bank's loans of several hundred million yuan that need to be repaid.

It is not yet clear whether there are other banks involved besides these two banks.

However, as early as the beginning of this year, there was news from media channels that by the end of June last year, LeTV had used most of the credit lines from CITIC Bank, Industrial Bank, China Zheshang Bank and other banks. LeTV's credit line from 12 banks was 2.42 billion yuan, of which 2.24 billion yuan had been used, with a utilization rate of 92.6%.

2. Funds, big retail investors and 190,000 retail investors in the secondary market

As the only decent existence of the LeEco system at present, its listed company LeTV (SZ: 300104) has been suspended for three months since its latest suspension.

However, it is foreseeable that LeTV, which is facing the risk of its major shareholder's liquidation, will have no hope of resuming trading in the short term.

Therefore, the following creatures buried deep in the secondary market still have to live in fear under the shadow of LeTV's continued debt.

According to the inquiry, LeTV was suspended on April 15, and its share price closed at 30.68 yuan in the previous trading day, with a total market value of 61.198 billion yuan.

As of the end of the first quarter of this year (March 31), the number of LeTV shareholders totaled 197,997, a month-on-month increase of 27,799 households, a growth rate of 16.33%, and the average shareholding per person was 6,427 shares.

Its top ten shareholders are Jia Yueting, Tianjin Jiarui Huixin Enterprise Management Co., Ltd., Liu Hong, Jia Yuemin, Cao Yong, Central Huijin Asset Management Co., Ltd., Zhang Jianping, Industrial Bank-China Post Strategic Emerging Industries Hybrid Securities Investment Fund, Agricultural Bank of China-China Post Information Industry Flexible Allocation Hybrid Securities Investment Fund and LeTV Holdings (Beijing) Co., Ltd.

Among the top ten shareholders, excluding LeTV-related individuals and companies, Jiarui Huixin holds 170,711,100 shares, accounting for 8.56% of the total share capital; Central Huijin holds 27,993,300 shares, accounting for 1.4% of the total share capital; retail investor Zhang Jianping holds 24,883,400 shares, accounting for 1.25% of the total share capital; Industrial Bank-China Post holds 15,351,000 shares, accounting for 0.77% of the total share capital; Agricultural Bank of China-China Post holds 14,904,300 shares, accounting for 0.75% of the total share capital.

It should be pointed out that Jiarui Huixin, ranked second among the above-mentioned top 10 shareholders, is a subsidiary of Sunac China, which previously provided strategic capital transfusion to LeTV.

As of March 31, among all shareholders of LeTV, there are 46 fund institutions. Among them, there are 41 fund institutions holding more than 10,000 shares, 33 holding more than 100,000 shares, 22 holding more than 500,000 shares, and 16 holding more than 1 million shares.

It is worth noting that among the shareholders of the above-mentioned listed companies, some private equity institutions and individuals were involved in the private placement announced by LeTV in August last year.

In this private placement, 107 million shares were issued at an issue price of 45.01 yuan, and the private placement raised nearly 4.8 billion yuan. Three public funds including Caitong Fund, Harvest Fund, and China Post Venture Capital Fund and retail investor Zhang Jianping took up the 4.8 billion yuan in this private placement.

Among them, Caitong Fund, Harvest Fund, and Zhongyou Venture Capital subscribed 39.1024 million shares, 21.3286 million shares, and 21.3286 million shares, respectively, with the subscription amounts of 1.76 billion yuan, 960 million yuan, and 960 million yuan, respectively; and Zhang Jianping personally spent 1.12 billion yuan to subscribe for 24.8834 million shares. These stocks have a lock-up period of 12 months and are expected to be listed on August 8 this year.

The share price of LeTV before it was suspended was 30.68 yuan. The three fund companies mentioned above and individual investor Zhang Jianping currently have a floating loss of 14.33 yuan per share, with a floating loss margin of 31.84% and a total floating loss amount of more than 1.5 billion yuan.

Once LeEco resumes trading, if there are no special measures, what will be left for these institutions and big investors is a series of limit downs without any suspense.

3. LeEco is a shareholder of a non-listed company

Currently, among the non-listed companies within the LeTV system, the high-quality assets coveted by the outside world for "repaying debts" mainly include LeTV Pictures, LeTV Sports and LeTV Zhixin.

Little do people know that the shareholders of these non-listed companies and private equity investment institutions are also suffering from the credit damage of the LeEco system.

LeTV Pictures

Founded in December 2011, LeTV Pictures has a registered capital of more than 836 million yuan and a total of 46 shareholders.

The company's top two shareholders are LeEco Holdings and Jiarui Huixin, with subscribed capital amounts of approximately 182 million yuan and 175 million yuan, respectively.

Among the shareholders of LeTV Pictures, there are at least six public figures who are well-known to the public, including film and television stars such as Zhang Yimou, Guo Jingming, Huang Xiaoming, Sun Honglei, Li Xiaolu and Sun Li (investment in the form of studio).

Among the five people, Zhang Yimou holds the highest proportion of shares, with his subscribed amount reaching 12.01 million yuan, while the other four people's subscribed amounts range from 590,000 yuan to 5 million yuan.

In addition, more shareholders are major equity investment institutions across the country, among which those with relatively high shareholdings include Shanghai Chunhua Jingli Investment Center (subscribed amount of 35.99 million yuan), Shenzhen LeTV Xingen No. 1 Investment Management Enterprise (subscribed amount of 29.992 million yuan), Beijing Yinye Jinhong Investment Partnership Enterprise (subscribed amount of 28.569 million yuan), Beijing Jinyang Asset Management Center (subscribed amount of 13.796 million yuan), Yongtai Jinfeng Investment Co., Ltd. (12.856 million yuan), etc.

LeTV Sports

LeTV Sports was established in March 2014 with a registered capital of 487 million yuan and a total of 47 shareholders.

As of now, the subscribed and paid-in capital of the company’s shareholders is still unclear.

But like LeTV Pictures, most of the 47 shareholders are private equity investment institutions, which shows that there was a period of time when the private equity market was quite enthusiastic about LeTV-related companies.

However, when the nest is overturned, no eggs can remain intact. These dreamers who once followed Jia Yueting together now have to face the embarrassment of being affected by the LeTV debt crisis.

However, compared with other affiliated companies, LeTV Sports is in a relatively good situation. After all, in May this year, the company announced the completion of its B+ round of financing, with a valuation of 24 billion yuan, despite its difficulties.

According to media reports, well-known private equity institutions such as HNA Capital, Zhongze Culture, Pusi Investment, Pingyin Energy and Mining, Oriental Fortune, Newpai Capital, and Yunfeng Fund have directly intervened in the management of LeTV Sports after this round of financing.

LeTV Zhixin

LeTV Zhixin is the operator of LeTV Super TV, an asset that is considered to be one of LeTV's best assets.

Founded in February 2012, LeTV Zhixin has a registered capital of 312 million yuan and a total of 7 shareholders.

LeTV is the company's largest shareholder, with a subscribed capital of 125.95 million yuan; however, according to query software, the actual amount paid was only 1 million yuan.

The other six shareholders have completed the payment of registered capital. In order of shareholding ratio, they are Tianjin Jiarui Huixin Enterprise Management Co., Ltd., LeTV Holdings, Ningbo Hangzhou Bay New Area Leran Investment Management Partnership, Xinle Asset Management (Tianjin) Partnership, China Life Insurance Co., Ltd. and Beijing Beimeihong Technology Co., Ltd.

4. Banks and securities firms involved in the equity pledge of Jia Yueting and others

According to incomplete statistics, Jia Yueting's journey of pledge financing based on listed companies began in 2011, and a total of 33 transactions were carried out in the years from then to October 2015.

These 33 transactions involved multiple securities firms, trusts and banks.

Among them, the 12 securities companies are: CITIC Securities, Cinda Securities, Southwest Securities, Shanxi Securities, Qilu Securities, Ping An Securities, Guodu Securities, Guosen Securities, China Development Securities, Haitong Securities, Guotai Junan Securities, and Orient Securities;

The five trust companies are: China Railway Trust, Shanghai International Trust, Shanxi Trust, Ping An Trust, and Dongguan Trust;

One asset management company is Shanghai Orient Securities Asset Management Co., Ltd.;

And one bank - China Minsheng Bank.

At present, most of them have been released from pledge. Only the pledge transactions involving Minsheng Bank, Haitong Securities and Shanxi Securities are suspected to still be in pledge status.

At present, the largest equity pledge involving Jia Yueting that is still in pledge status is the pledge of 507 million shares on October 26, 2015.

There is currently no public information clarifying the pledger of this pledge transaction.

It is reported that these 507 million shares come from 467 million LeTV executive locked shares held by Jia Yueting and 40 million unrestricted tradable shares.

At this point, Jia Yueting has pledged almost all of his shares in LeTV.

5. LeEco corporate bonds

According to media reports, LeTV's latest corporate bond - the 2016 public issuance of corporate bonds project - was in a "suspended" state in the first quarter of this year.

The full name of the bond is "LeTV Information Technology (Beijing) Co., Ltd. 2016 Public Offering of Corporate Bonds to Qualified Investors".

It is reported that the issuance scale of the bonds will be adjusted to no more than 2 billion yuan (including 2 billion yuan). All funds raised will be used to supplement working capital.

In addition to this aborted project, there are two other corporate bonds issued by LeTV - 15 LeTV 01 and 15 LeTV 02 bonds. The main underwriter is Debon Securities. They were issued in August and September 2015 respectively, with a term of three years.

The total financing scale of the two bonds reaches 1.93 billion yuan and will mature in August and September next year.

It is worth noting that the issuance rates of the two bonds were very high at that time, at 8.5% and 7.5% respectively.

However, it is not clear who holds the two bonds.

In addition to issuing corporate bonds, LeTV-related companies also hope to complete the repayment work on the supply chain side through debt-to-equity swaps.

In mid-February this year, LeTV Zhixin introduced LeTV's mobile phone supplier and creditor as a strategic investor, saving itself for the first time by converting debt into equity.

According to the announcement released by LeTV at the time, the controlling subsidiary LeTV Zhixin planned to increase capital and expand shares. Tonly Electronics invested 720 million yuan to subscribe for all the capital increase, accounting for 2.3438% of the shares, with a valuation of approximately 30.7 billion yuan.

However, debt-to-equity swaps are not applicable to all creditors.

In March this year, LeTV Zhixin planned to repay another creditor, Quanta Computer Technology, by increasing capital and expanding shares again.

However, Compal has shelved its plan to invest in LeEco's subsidiaries as it assessed that LeEco's performance in repaying its debts was poor.

According to reports, as of November 2016, LeEco owed Compal and Truly a total of US$700 million. As of the end of March 2017, LeEco still owed Compal about RMB 900 million in accounts receivable.

6. LeEco employees involved in the employee stock ownership plan

On September 20, 2016, LeTV announced that as of that day, the first phase of LeTV's employee stock ownership plan had purchased a total of 10.9535 million shares of the company through secondary market bidding transactions, accounting for 0.55% of the total share capital, with a transaction amount of RMB 510 million and an average transaction price of RMB 46.61.

The lock-up period for the shares purchased under this plan is from September 20, 2016 to September 19, 2017.

Based on LeTV's current suspended price of 30.68 yuan, the employee stock ownership plan has fallen by 34%, with a floating loss of 174 million yuan.

7. Jia Yueting’s “Good Chinese Classmate”

Among LeTV’s creditors, there is a group of Jia Yueting’s “good Chinese classmates” who cannot be forgotten.

In mid-November 2016, when the debt crisis on the supply chain of LeEco broke out, more than a dozen of Jia Yueting’s classmates at the Cheung Kong Graduate School of Business lent a helping hand and signed a $600 million investment agreement for the LeEco car project.

Among them, the first batch of US$300 million in funds arrived that month.

In the thank-you statement subsequently released by LeTV, the names of these entrepreneurs appeared: Zhou Jianping, chairman of Heilan Group, Ke Xiping, chairman of Hengxing Group, Liu Shaoxi, chairman of Yihua Group, Huang Minli, chairman of Minwah Holdings, Wu Guangming, chairman of Yuyue Group, Liu Dianbo, chairman of Green Leaf Group, and Lu Wenchun, chairman of Chengxin Group.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.