ZTE shares edge up after $10.7 billion credit proposal

The logo of China's ZTE Corp is seen on the building of ZTE Beijing research and development center in Beijing
The logo of China’s ZTE Corp is seen on the building of ZTE Beijing research and development center in Beijing, China June 13, 2018. REUTERS/Jason Lee

June 14, 2018

HONG KONG (Reuters) – Shares of Chinese telecommunications giant ZTE Corp rose as much as 3.7 percent in Hong Kong on Thursday, after the firm proposed a $10.7 billion financing plan and the nomination of eight new board members.

China’s No.2 telecom equipment maker, which just agreed to a $1.4 billion settlement with the U.S. government to be pardoned from a supplier ban, saw its Hong Kong-listed shares rise to HK$15.52 in morning trade, outperforming the benchmark Hang Seng Index that dipped slightly.

But ZTE’s Shenzhen-listed shares dropped by the maximum daily allowed limit of 10 percent on mainland exchanges.

A day earlier, ZTE’s Hong Kong-listed shares had plunged 41 percent, their biggest decline in history, as the stock resumed trading after being suspended for almost two-months due to the U.S. ban that threatened to put it out of business.

In filings late on Wednesday, ZTE proposed to nominate 8 board members, to be voted at an AGM on June 29.

It also proposed to allow the board to apply for $10.7 billion credit line, including a 30 billion yuan credit line from Bank of China and $6 billion credit line from China Development Bank.

(Reporting by Sijia Jiang; Editing by Himani Sarkar)

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