Hi-P International starts USD126m lawsuit against delinquent customer Yota

Yota failed to pay for all its orders.

Hi-P International has started arbitration proceedings against Yota Devices, the makers of Yotaphone 2.

The group’s subsidiary Hi-P Electronics previously inked a deal with Yota to develop, manufacture and supply the Yotaphone 2 dual-screen smartphone, and was their main design, manufacturer and supplier.

Now, Hi-P is claiming a total of US$126m because Yota allegedly failed to take delivery of and make payment for the full minimum order quantity and firm forecast committed by Yota for the Yotaphone 2.

According to RHB Research, the proceedings have a potentially substantial negative impact against Hi-P.

“With the bulk of the goods now parked partially under account receivables and inventory on its balance sheet, failure to win the arbitration or claim the full amount of USD126m will likely result in a substantial negative impact in terms of write-offs on its balance sheet and P&L. Hi-P might also lose a customer in Yota if its relationship continues to turn sour with this arbitration, despite entering into a ramp-up phase not too long ago for this product,” RHB said.