Gionee, a Chinese smartphone company, is officially now bankrupt. The phone manufacturer recently filed its application and a Shenzhen court has now accepted the application for liquidation bankruptcy by Huaxing Bank. The company’s major suppliers have also filed a lawsuit against it.
According to a China-based IFENG, Gionee owes nearly $2.9 billion to 648 creditors, and about half of the debt is to banks. Additionally, the report cites that, though the company has hit the bankruptcy, Gionee could still save itself and might still turn into a reorganized company.
The phone maker reportedly hired restructuring consultants last week with regards to reorganizing the company as Gionee’s chairman Liu Lirong strongly believes that the company can still turn its fortune in three to five years.
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“It is expected that the bankruptcy reorganization process will be entered next month, and then the court will take over. It is Jinli can do it in three to five years. My biggest wish now,” Lirong had said in an interview with the Security Times earlier this year. Furthermore, several reports suggest that Gionee is yet to pay its ad agencies as well as suppliers.
Gionee started facing major problems when the company’s chairman lost a whopping $144 million bet in a casino, for which he acknowledged that he may have borrowed company funds; however, he first denied to admit the same. Furthermore, GSMArena reported that “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.”