No one can save LETV when its 10 billion yuan debt is terminated

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Wen / Guandu
Source: connect insight (ID: lxinsight)
On May 14, the Shenzhen Stock Exchange announced that it decided to terminate the listing of LETV.
According to the regulations of Shenzhen Stock Exchange, a company whose listing is terminated will no longer accept the application for re listing.
The next 30 trading days will be the delisting consolidation period, with 280700 shareholders leaving the last moment to escape.
On May 12, Liu Yanfeng, the current chairman of LETV, mentioned that all of Jia Yueting’s shares were frozen and most of his shares were pledged, but he is still the actual controller. In response, Jia Yueting Fang LETV Holdings said that Jia Yueting has not actually controlled LETV network.
Jia Yueting is an indelible mark on LETV. When LETV went public in 2010, the scenery was limitless. LETV entered the stage of blindfolded running. Jia Yueting’s speech was full of passion, the slogan of “ecological anti” was loud, and LETV’s share price rose again and again.
Before it was revealed that the capital chain was broken at the end of 2016, Jia Yueting was faced with flowers and applause.
In order to save LETV, Jia Yueting found sun Hongbin, the “knight in white”. Sun Hongbin once interviewed analysts, LETV opponents and all the executives of LETV, and said that “he did not fully understand LETV, but he understood the cash flow of LETV.”
After one month of contact, sun Hongbin entered the venue, trying to solve the problem of lack of money of LETV at one time.
But a year later, sun Hongbin’s investors on LETV said they would “give up the bet” and wrongly judged that the debts owed by related parties to listed companies could not be effectively repaid.
Sun Hongbin’s total investment of nearly 20 billion yuan to LETV in 2018 cannot prevent the disintegration of LETV’s “ecology”.
Sun Hongbin resigned as chairman of LETV after “giving up”, and at the same time, he carried out the divestiture of assets and liabilities. After “taking away” two high-quality assets of LETV (formerly LETV super TV) and LETV Entertainment (formerly LETV film industry) at a low price, he in turn urged LETV for debts.
It can be said that LETV has been completely abandoned by sun Hongbin and Jia Yueting.
Jia Yueting (left) and sun Hongbin (right), micro blog of Jia Yueting in tuyuan
According to LETV’s financial report, by the end of 2019, LETV’s net assets attributable to shareholders of listed companies were negative 14.3 billion yuan, while Liu Yanfeng mentioned on May 12 that the company currently has no plans to increase capital and implement debt restructuring.
LETV is still pursuing compensation from Jia Yueting. The final hearing on Jia Yueting’s bankruptcy and reorganization will be held in the bankruptcy court of central California on May 21.
However, it should be noted that the scope of LETV’s debt is the affiliated enterprises of listed companies controlled by Jia Yueting, including LETV holdings.
Liu Yanfeng once said that the enterprises actually controlled by Jia Yueting and Jia Yueting’s individuals are different legal entities. At present, the debt balance of the enterprises actually controlled by Jia Yueting to the merger scope of the listed companies has reached about 1.9 billion yuan. Even if Jia Yueting’s individual application for bankruptcy is successful, the debts of the enterprises and companies actually controlled by Jia Yueting still exist.
LETV’s ten-year thrilling journey on GEM has now come to an end.
One
The mystery of “controlling people practically”
Before the listing of LETV was terminated, there was a debate about whether Jia Yueting was the actual controller of LETV.
At LETV’s 2019 annual performance presentation meeting on May 12, Liu Yanfeng announced that Jia Yueting is still the actual controller of the company. Meanwhile, Wu Baoyu, its director, said that since 2018, LETV has made no progress in debt treatment with major shareholders and related parties.
Yesterday, on the morning of the same day that LETV ceased listing, LETV holdings issued a statement denying that Jia Yueting had ceased to hold any position on LETV since he resigned as chairman of LETV in July 2017. Up to now, the current directors, supervisors and senior executives who actually control LETV have controlled LETV.
According to the statement, after July 2017, Jia Yueting has resigned from all his posts on LETV. Com, and with the departure of the directors, supervisors and senior executives nominated or appointed by him in the early stage, he has lost control of the board of directors of LETV. Although it is still the largest shareholder of LETV, 23.07% of its shares have been frozen and most of them have been pledged.
However, LETV said to the Shanghai Securities News that up to now, the regulatory authorities still identified Jia Yueting as the actual controller of LETV.
The reason why LETV and LETV holdings argue about the “actual controller” is the poor performance in the 2019 financial report released by LETV on April 26, which resulted in the mutual “throwing pot”.
According to the financial report, in 2019, LETV only achieved an operating revenue of 486 million yuan, a year-on-year decrease of 68.83%; the loss of net profit reached 11.28 billion yuan, a year-on-year decrease of 175.39%. In addition to the loss of the previous two years, the accumulated loss of net profit in the three years was about 30 billion yuan, and it was insolvent for two consecutive years, and the net assets at the end of 2019 were – 14.33 billion yuan.
In addition, the Q1 financial report of 2020 disclosed by LETV at the same time shows that the current loss is 150 million.
In fact, in 2019, the regulatory authorities strengthened the strict delisting system to purify the ecology. In addition, LETV was suspended from listing in May last year due to its negative audited net assets in 2018 annual report.
According to the Shenzhen Stock Exchange, listed companies will be forced to withdraw from the market one year after being suspended.
Defeat is like a mountain. Liu Yanfeng, who was elected chairman of the company in May last year, can’t undo the decline.
LETV lost nearly 11.3 billion yuan again after a huge loss of 13.8 billion yuan in 2017, which was mainly caused by Jia Yueting. Because of its violation of regulations to provide guarantee for LETV sports and LETV cloud financing, after the latter defaulted, LETV accrued more than 9.064 billion yuan of liabilities for this, including about 7.484 billion yuan of liabilities for LETV sports cases.
According to e company’s previous reports, 18 investors of LETV sports have filed an arbitration against LETV sports in the case of LETV sports guarantee in violation of rules and regulations, and one investor has filed a lawsuit against the company, and 17 arbitration cases that have issued results have all been lost by the company.

Compared with this huge debt of more than 9 billion yuan, LETV only has a total revenue of 485 million yuan in 2019, compared with the data of 7.03 billion yuan and 1.53 billion yuan in the previous two years.
This huge hole cannot be filled by LETV.
In 2015, it exceeded the market value of 150 billion yuan. Today, the market value is only 6.742 billion yuan. Its annual revenue has shrunk by 97.73% in three years. LETV has been defeated and is insolvent.
Two
Continuous “Sao operation” in the rush period
In the first ten years of LETV’s establishment, it worked hard in the field of content, but after entering into Internet TV and launching super TV in 2013, its action seemed to be pressed the double speed key, a series of operations dazzled the onlookers.
Outsiders have long been suspicious of the company.
At the initial stage of listing, when the video websites were generally losing money at that time, the outside world had doubts about LETV’s first profit, as well as its capital operation such as Huaer film and television, which purchased financial data at a premium of 8 times in 2013 and had significant loopholes.
Especially in 2014, the year before the peak of LETV’s market value, LETV has shown many confusing phenomena.
For example, in 2014, Jia Yueting’s brother and sister pledged their shares and settled them up to 12 times.
In addition, during the year, LETV was suspended for many times due to the following reasons: the General Administration of radio, film and television issued a rectification order related to Internet TV on July 15, the suspension due to “major issues” on July 28, the media reported that the General Administration of radio, film and television criticized LETV UI for violating laws and regulations on August 21, and LETV again suspended due to “major issues” on October 26.
In the process of LETV being questioned and suspended repeatedly by the outside world, Jia Yueting went to the United States in early June of that year according to the official criteria of LETV. The purpose of this trip is to lay a solid foundation for the overseas deployment of LETV, a listed company of A-share gem.
In an exclusive interview with sina finance and economics, Jia Yueting once said that 2014 was the first year of the launch of LETV’s globalization strategy. The unique ecological mode of “platform + content + terminal + application” of vertical integration should be copied overseas to build LETV into a global brand.
In the months when he stayed abroad, he left many traces of “expanding business” in Hong Kong, the United States and Europe.
In October of that year, LETV established a subsidiary in Los Angeles, USA;
In December, Jia Yueting announced LETV’s “see plan” to build a super car and automobile Internet electric ecosystem;
At the end of January 2015, LETV successively released the leui auto version of the auto UI system and officially confirmed its entry into the mobile phone field;
Another four months later, the launch of three models of LETV super mobile phone was held in Beijing and Silicon Valley at the same time, and entered the mobile phone industry in an ecological mode.
Perhaps the total revenue of LETV’s whole ecosystem business in 2014 was close to 10 billion yuan, which gave Jia Yueting confidence. Jia Yueting and LETV made great progress and gradually built LETV’s seven ecological sectors, namely Internet application and cloud service, content, large screen, mobile phone, sports, automobile, Internet finance, and began to expand radically.
In this period, under its ecology, the original content also showed leeco’s ambition. Leeco video launched “Legend of Zhen Huan” and many other blockbusters. Leeco sports was crazy about money, and won many important event copyrights for exclusive broadcasting at a high price. Leeco film industry and leeco sports attracted many well-known directors and actors.
Exclusive copyright of LETV TV, tuyuan Jia Yueting Weibo
In this year, Jia Yueting often appeared in the eyes of the public with tears and choking. His “dream” reaped the trust of LETV employees and the understanding of investors.
On May 12, 2015, LETV’s share price reached a record high, soaring to 179.03 yuan, with a total market value of 152.657 billion.
From LETV, a content aggregator, to attacking everywhere in the field of automobiles and mobile phones, its ability to burn money is no less than the ability to obtain funds.
According to insight, in the past seven years since its listing in July 2017, LETV has accumulated more than 30 billion yuan of financing; and as of July 9 of the same year, the total amount of LETV’s equity pledge accounted for 96.66% of the circulating shares, of which 65.34% was not released, that is, LETV has obtained a large amount of funds through equity pledge.
LETV’s hardware subsidies since 2013 have made it lose 3.841 billion on end products in 2016 by seizing market share, acquiring companies and buying copyrights at a high price.
In November 2016, Jia Yueting once said that he predicted that LETV would need at least 40 to 50 billion yuan of investment to build cars.
With the unstable ecological foundation of LETV, there is no way to support the huge ecosystem of super mobile phones and super cars.
Mobile phone of LETV, tuyuan jiayueting micro-blog
Three
Sun Hongbin takes away high-quality assets at a low price
These aggressive expansion actions also later pulled LETV into the abyss.
In many businesses, Jia Yueting held high. One and a half years after the highlight moment, Jia Yueting publicly admitted at the end of 2016 that there was a tight capital chain in LETV. At that time, he pledged 983 million shares of LETV, accounting for 24.63% of the total equity.
After Jia Yueting’s open letter “the sea and fire of LETV: is it engulfed by a huge wave or boil the sea”, many people still think that LETV can “survive”.
At that time, LETV also had external funds to be introduced. On January 13, 2017, LETV introduced a number of strategic investors, including rongchuang China, with a total investment of 16.8 billion. After that, Tencent, Jingdong and Suning e-buy raised 1.6 billion yuan.
On May 21, 2017, after Jia Yueting resigned as general manager, letv.com issued a notice on the evening of September 27 to change its Chinese name and English name to “new LETV”.
The reason for renaming lies in the strategic adjustment. It will inherit the ecological concept of “platform + terminal + content + application”, focus resources on the ecological advantages of large screen, and become the leader of the cultural consumption upgrading Tide Based on the family Internet.
This is believed to be sun Hongbin and Liang Jun, after taking the helm, hoping to thoroughly cut the listed company system and the non listed system of LETV holdings.

Over the past three years, LETV has changed its executives and chairman several times in an attempt to clean up the mess it left behind.
Liang Jun, Liu Shuqing and Zhang Wei successively took over the post of general manager and resigned; in July 2017, sun Hongbin became the new chairman of the board of directors, and resigned as chairman in 2018, leaving the board of directors and no longer holding any post.
After Liu Shuqing resigned as chairman and director in May 2019, Liu Yanfeng was elected chairman.
But no one can solve the problem of LETV. At the end of 2018, LETV’s share price four point zero one Yuan, down nearly 85%, and suspended several times during the period.
Sun Hongbin, who was supposed to rescue LETV, began to stop losses and “take” high-quality assets at a low price.
In September 2018, LETV holding’s lenrong Zhixin 15.33% Equity, LETV film 21.81% The shares were auctioned by the judiciary.
Tianjin Jiarui, a subsidiary of rongchuang group, was the only buyer to participate in the auction, which was successful at the starting price. It’s worth noting that in the end, the price of these assets is only Seven point seven Billion yuan, the value of which has been greatly reduced, and it has been appraised as “cheap sale” by the outside world.
When LETV lost these two high-quality services, it was close to the collapse of the whole line.
After the auction, the shareholder structure has changed. Tianjin Jiarui has become the largest shareholder of LETV Zhixin and LETV, but LETV still owes a debt to rongchuang.
According to LETV’s announcement, at the beginning of December 2018, Tianjin Jiarui and rongchuang sent a letter of Dunning and notice to LETV. On June 12, 2019, LETV received the arbitration applied by rongchuang and Tianjin Jiarui, requiring LETV to pay the loan principal immediately twelve point nine Billion yuan nineteen point one four Billion yuan, interest loss, liquidated damages and other payments, totaling over 3.2 billion yuan.
In response, LETV said in the previous announcement that it could not repay, and there was a risk that the creditor applied for litigation or the pledged assets were disposed according to law due to the outstanding principal and interest.
In the 2018 annual report, LETV has been unable to cope.
Revenue in 2018 fifteen point five eight Billion yuan, down year on year 77.83% 。 The net profit attributable to the shareholders of the listed company is- forty point nine five Billion yuan, increased year on year 70.49% 。
The annual report explained that the company’s cash flow was tight because the receivables of related parties controlled by Jia Yueting had not been recovered, and the market brand and credit system were affected, so the operation was seriously hindered.
On the eve of LETV’s suspension of trading in 2019, there are still investors who have expectations for LETV. Some people have expressed their hope to the media that LETV’s assets will be restructured. The Internet video license plate itself is the value. If the assets are restructured and the trading is resumed, there may be several times of increase, which has also appeared in the history of A-share.
Even though some people have been looking forward to the recovery of LETV, in the end, LETV has come to the point of termination of listing.
Today, only 280000 shareholders and 247 on-the-job employees are left, and their main source of income is almost the payment business, accounting for the proportion of operating income 65.8% 。
“I wish LETV had fallen to the bottom. If we don’t reach the bottom of the valley, we will get worse day by day and have problems day by day. At the bottom of the valley, it turns out that it won’t be worse. It’s time to go up. ” LETV employees once told the media that.
But now, LETV may not be able to return to the sky.
(statement: This article only represents the author’s point of view, not Sina’s point of view.)