Chinese smartphone makers have been getting into all kinds of trouble lately, Huawei’s case being the latest. Today we received news about Gionee, another phone maker, that is declaring bankruptcy in China.
For those who don’t know, QMobile in Pakistan has been selling rebranded Gionee phones since the start. From the low-end phones to the slightly better ones, they’re always sourced from Gionee’s original phones.
Gionee has been having a bad year. The company filed for liquidation bankruptcy at Huaxing Bank, submitting its application to a court in Shenzhen, which has been accepted. This could result in a major restructuring as Gionee has hired restructuring consultants a week ago.
The company’s founder Liu Lirong is of the opinion that Gionee can bounce back within 3-5 years.
Gionee’s Debt Situation
To put things into perspective, the company currently owes CNY 20.2 billion (around $3 billion) to a total of 648 creditors in China. Half of those creditors are banks. Gionee hasn’t been able to pay its suppliers and ad agencies either.
An interesting and rather unfortunate development has worsened the companies finances as well. The company founder Liu lost a massive CNY 1 billion (~$144 million) that he bet in a casino recently. When asked about the source of his gambling money, he claimed that he hasn’t used the company’s money but may have “borrowed company funds”.
Liu further adds to this, saying that Gionee had been losing CNY 100 million (~$14.4 million) per month from 2013 to 2015, with the losses doubling over the past two years.
What Happens to QMobile?
This could also put the fate of QMobile in jeopardy if Gionee does indeed end up closing down its business in China. However, if the company does manage to survive and restructure within the next 3-5 years as Liu Lirong claimed, then we might still see QMobile phone launches over the next few years in Pakistan.