Chinese smartphone maker Gionee, has officially filed for bankruptcy in which it owes 20.2 billion Chinese Yuan ( roughly $3 billion) to 648 creditors
According to an interview with Securitties, Liu Lirong, Gionee founder and CEO admitted that Gionee's total debt amount to 17 billion Yuan, with 10 billion yuan owned to banks, 5 billion yuan to upstream suppliers and about 2 billion yuan to ad agencies.
Liu claims that Gionee was loosing about 100 million yuan ($14.4 million) a month between 2013 and 2015. The company's chief further claimed that the losses per month doubled in the last two years.
To add to its woes, Gionee's boss lost a 1 billion yuan ($144 million) bet in a casino. Liu however said he didn't use company's money, but admitted to have borrowed company funds for the gamble.
Gionee still believes things can turn around. Last week, the company hired restructuring consultants to help the company get back to its feet. Gionee's CEO says it take the company about 3 - 5 years for this to turn-around.