ZTE Corp stated it was seeking to raise 11.51 billion yuan ($1.7 billion) from a private placement of A-shares and that it plans to make use of the proceeds for research and development (R&D) of 5G networks in addition to working capital.
The Chinese telecom tools maker stated Thursday it planned to issue 381.098 million A-shares, or 8.27% of the total issued share capital on completion of the deal, to unbiased third-party investors at 30.21 yuan apiece.
That represents a discount of 18.2% to ZTE’s A-share closing price of 36.92 yuan in Shenzhen Wednesday.
The A-shares that are subject to a lock-up interval of 12 months from the date of listing will be issued to 10 impartial professional or institutional traders in China.
None of the subscribers will develop into a substantial shareholder upon completion of the share sale, the corporate mentioned, without offering additional details.
The company had not responded to an electronic mail request for comment on the identity of the clients.
ZTE’s Shenzhen-listed shares surged up to 4% to 38.10 yuan in earlier commerce. Hong Kong-listed stock briefly soared 3.7% to HK$28.05, the highest since March 2018.
ZTE said the agreement would allow it to maintain its high level of investment in R&D, ensure its technological competitive edge, develop its main merchandise and companies and assist in increasing its market share in the mainstream markets.