ZTE shares edge up after $10.7 billion credit proposal

A man walks past a building of ZTE Beijing research and development center in Beijing, China June 13, 2018. REUTERS/Jason Lee

HONG KONG (Reuters) – Shares of Chinese telecommunications giant ZTE Corp <0763.HK> 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 <.HSI> that dipped slightly.

But ZTE’s Shenzhen-listed shares <000063.SZ> 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 <601988.SS> and $6 billion credit line from China Development Bank.