ZTE seeks US$10.7b to rebuild operations
HONG KONG: Chinese telecommunications giant ZTE Corp has proposed a US$10.7 billion (RM42.61 billion) financing plan and nominated eight board members in a drastic management overhaul, as it seeks to rebuild a business crippled by a United States supplier ban.
The news indicates the telecom equipment maker is working towards meeting the conditions laid out by the US so it could resume business with American suppliers, who provide between 25 and 30 per cent of the components used in its equipment.
Investors cheered the development, driving up ZTE’s Hong Kong-listed shares as much as 3.7 per cent yesterday morning, outperforming the Hang Seng Index that dipped slightly.
A day earlier, its shares plunged a record 41 per cent in Hong Kong and 10 per cent in Shenzhen, wiping out almost US$3 billion off ZTE’s market value, as it resumed trading after being suspended for almost twomonths due to the US ban.
The US imposed the seven-year supplier ban on the telecommunications equipment maker in April after it broke a pact to discipline executives who conspired to evade US sanctions on Iran and North Korea.
ZTE last week agreed to pay a US$1 billion fine to the US government. The ban will not be lifted until ZTE places another US$400 million in an escrow account in a US-approved bank for 10 years.
ZTE was also ordered to radically overhaul its management and hire a US-appointed special compliance coordinator.