HONG KONG: Chinese telecom equipment maker ZTE Corp’s controlling shareholder plans to reduce its stake by as much as 3% after the stock more than doubled in value since surviving a US sanction last year, showed regulatory filings late on Tuesday.
The stock slumped as much as 7.6% in Shenzhen on Wednesday following the news. Its Hong Kong-listed shares dropped as much as 5.6%.
The Chinese firm was crippled early last year after breaking US sanctions and was only able to resume business in July after paying US$1.4 billion in penalties to lift a US supplier ban. The stock has since risen around 150% in Shenzhen.
ZTE in the filings said state-owned controlling shareholder Zhongxingxin Telecom plans to sell up to 2% in ZTE A-shares via block trades within 90 days.
Zhongxingxin has also proposed to use not more than 41.9 million ZTE A-shares, or 1% of the company’s total share capital, to subscribe for units in the ICBCCS SHSZ 300 exchange-traded fund.