Gionee, the Chinese smartphone maker which declared bankruptcy in December, has launched two smartphones in a bid to repay debts numbering in the billions of RMB.
Why it matters: Founded in 2002, Shenzhen-based Gionee was once one of China’s largest mobile phone makers. The company accounted for 4.7% of China’s mobile phone market in 2012 and had expanded to India, Southeast Asia, and Africa before it went bankrupt.
- Whether sales from the new smartphones could potentially repay Gionee’s massive debt totaling RMB 17.3 billion (around $2.4 billion) is unknown.
Details: The two handsets, the Gionee M11 and M11s, have been granted their network access certificates from the Telecommunication Equipment Certification Center of the Ministry of Industry and Information Technology on August 29, its website (in Chinese) shows.
- Gionee said on its WeChat official account on Monday that the two devices will go on sale, without mentioning prices or dates.
- The temporary revival of Gionee’s smartphone business was orchestrated by Lu Guanghui, the company’s second-largest shareholder, with the goal of repaying the company’s debts, according to Chinese media outlet Jiemian citing a person familiar with the matter.
- The handsets will be manufactured and sold by Xiaolajiao, a Shenzhen-based equipment manufacturer, because Gionee’s plants have been shut down, said the person, and Xiaolajiao will pay Gionee RMB 10 (around $1.4) for every device sold.
Context: In December, nearly 20 creditors filed a bankruptcy liquidation application to the Shenzhen Intermediate People’s Court against Gionee after months of talks with the smartphone maker failed to produce funds for repayments.
- The court said in April that 372 creditors claimed Gionee accrued debts totaling RMB 17.3 billion, and appointed a debt administrator which announced a repayment scheme based on liquidating Gionee’s assets.
- Prior to these two new phones, Gionee’s last smartphone model was the F205L, which went on sale in January 2018.