Gionee Goes Bankrupt Owing Nearly $2.9 Billion To Creditors, Hoping To Comeback

The Chinese smartphone producer and once a top smartphone maker, Gionee, officially declares bankruptcy. The company’s liquidation bankruptcy application has been accepted by a Shenzhen court. Also, major suppliers of Gionee have filed a lawsuit against the Chinese company.

China-based IFENG reports that the Chinese phone manufacturer owes a total of around $2.9 billion to 648 creditors and half of its debt is to the banks. IFENG also said that despite being official bankrupt, the company could still turn into a reorganised company to save itself.

The Chinese company was reported to hire restructuring consultants to streamline and reorganise the company as Liu Lirong, chairman of Gionee, has a strong belief that Gionee could see a turnaround in the company's fortune in 3-5 years.

“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,” said Lirong in an interview. Some reports claim that the company has yet paid its suppliers and ad agencies.

Gionee F205 was the latest smartphone along with Gionee S11 Lite launched by Gionee in April this year

Shenzhen-based Gionee was founded in 2002 in Guangdong. It occupied a fair market share in the Chinese market and also some presence in Vietnam, India, Nepal, Philippines, Bangladesh, Taiwan, Nigeria, Algeria, Myanmar and Thailand. At some point, Gionee was even a prominent phone brand in India and challenged other established phone brands like Samsung and Nokia.

The company reportedly started going downhill when its chairman spent $144 million on gambling in a Saipan casino and lost. He first denied the claim accusing him of borrowing his company’s funds but later admitted it. Furthermore, according to GSMArena, Liu said that the Chinese company’s month lost between 2013 and 2015 was about 100 million CNY (approximately Rs. 101,3 crores). And the monthly losses doubled in the past 2 years.