A number of employees from Royole, a flexible display developer in China, told local media outlet Jiemian News on Thursday that, as of Friday night, they had received all the wages they were previously owed. However, the company only repaid the wages of on-the-job employees and employees who have left the job but have not gone through arbitration.
Further, a number of on-the-job employees said that they have received all the wages in arrears except the promised year-end awards and reimbursement, but they don’t know whether the wages of April will be paid as scheduled.
As for where the company got the money from, Royole has not yet issued an official response. People familiar with the matter said that the funds came from bank loans, but this statement has not been officially confirmed.
Founded in 2012, over the past 10 years, Royole has grown into a high-profile unicorn enterprise with a valuation of over $6 billion. However, since the establishment of the company, it has been difficult to achieve profitability. From 2017 to the first half of 2020, the company’s accumulated revenue was only 517 million yuan ($77 million), but its accumulated losses have reached 3.195 billion yuan.
Since the end of 2021, Royole was reported to have a shortage of funds and was facing arrears in its employees’ salaries. At the beginning of April this year, Royole had not paid employees’ salaries and some employees were even forced to take a break. Only a small number of production lines were still in operation at that time.
Last month, Liu Shuwei, independent director of Royole, commented on the lack of funds: “The flexible screen production line was put into production in 2018 while some research achievements of applying other innovative technologies have been completed in the past year or two. Therefore, before Royole could explore new markets and create sufficient operating cash flow, the company had already experienced a shortage of funds, which led to the failure of the flexible screen production line to operate normally.”
“I suggest that governments at all levels actively help Royole solve the shortage of funds and introduce strategic investors in order to open up the market of flexible screens in China,” Liu added.