One of China’s largest online video companies, Le.com, said on Tuesday the company is facing the risk of negative net assets, if it continues to suffer losses in the year ahead, The Paper reported.
The Shenzhen Stock Exchange issued an inquiry letter asking whether the company will be confronted with the risk of all or a major part of its business grinding to a halt.
While Le.com replied that the company’s current overall financial arrangements are in great difficulty and cash flow is extremely tight. If there is no new capital injection, the company will be unable to continue its business operations.
Meanwhile, the company has a relatively large debt repayment risk, as there is a total 5.619 billion yuan (US$890 million) of looming debt which is due in 2018. By the end of 2017, Le.com‘s operating liabilities amounted to 7.1 billion yuan.