We have some good news and some bad news about Gionee. The good news is
that one day there may be a movie about what happened. The bad news is
that the company has officially entered bankruptcy.
A court in Shenzhen has accepted the application for liquidation bankruptcy by
Huaxing Bank. This may still turn into a company reorganization – Gionee
hired restructuring consultants last week. Founder Liu Lirong thinks
that the company can turn its fortunes around in 3-5 years.
However, Gionee owes a total of CNY 20.2 billion (around $3 billion) to 648
creditors. About half of the debt is to banks. Earlier this year the
company failed to pay suppliers. Ad agencies haven’t been paid either.
Gionee’s money troubles were exacerbated when Liu – founder and chairman – lost a
CNY 1 billion bet in a casino. That’s a whopping $144 million! He
claims he didn’t use company money admits he may have “borrowed company
funds”. Like we said, this story would make quite a movie.
For comparison, Liu claims that the company was losing around CNY 100
million ($14.4 million) a month between 2013 and 2015. The losses per
month doubled in the last two years.
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