ZTE plans to raise 11.5 billion yuan to develop 5G from private share sale
- The Shenzhen-based company is set to issue 381,098,968 A shares to independent third-party investors
- The issue price, at 30.21 yuan, is an 18.2 per cent discount from ZTE’s A-share closing price of 36.9 yuan in Shenzhen on Wednesday
ZTE Corp plans to raise 11.5 billion yuan (US$1.7 billion) from a private placement of A shares for working capital as well as 5G network research and development (R&D), as Chinese carriers pin high hopes on mass adoption of the next-generation wireless technology.
The Shenzhen-based company is set to issue 381,098,968 A shares to 10 independent third-party investors, it said in a statement released on the Shenzhen Stock Exchange without disclosing the identities of the investors. Upon completion of the deal, the shares would account for 8.27 per cent of ZTE’s total issued share capital, according to the company.
The issue price of the A shares, which are subject to a lock-up period of 12 months from the date of listing, is 30.21 yuan. This is a discount of 18.2 per cent from ZTE’s A-share closing price of 36.9 yuan in Shenzhen on Wednesday. The share sale will not change the controlling shareholders of the company, it said.
ZTE is the world’s fourth largest telecommunications equipment vendor after Huawei, Nokia and Ericsson. Fellow Chinese tech titan Huawei Technologies, the world’s biggest network equipment maker, has invested billions of dollars in 5G networks and is considered to be the industry leader. Huawei has however come under pressure from the US, which has banned it from buying US origin technology on national security grounds.