Chinese telecom company ZTE Corp had been subject to U.S. sanctions. Its controlling state-owned controlling shareholder Zhongxingxin Telecom plan on selling as much as 2% of its shares once the stock has doubled its value.
According to regulatory filing, the controlling stakeholders of China’s ZTE Corp’s plan to slash their stake, by as much as 3%, once the stock more than doubles its value.
ZTE was subject to U.S. sanctions in 2018.
With the news reaching the market, ZTE Corp’s shares slumped by as much as 7.6% in Shenzhen on Wednesday while its Hong Kong-listed shares dropped as much as 5.6%.
In 2018, the Chinese company’s business came to a grinding halt after it was caught breaking U.S. sanctions and only managed to scrape through by paying a hefty penalty of $1.4 billion to lift a U.S. supplier ban. Since then, the stock has risen by 150% in Shenzhen.
In its filing to the stock exchange, ZTE stated, state-owned controlling shareholder Zhongxingxin Telecom plans on selling up to 2% in ZTE A-shares via block trades within 90 days. Further, Zhongxingxin has also proposed to use not more than 41.9 million ZTE A-shares, equivalent to 1% of the company’s total share capital, to subscribe for units in the ICBCCS SHSZ 300 exchange-traded fund.