Chinese telecoms equipment maker ZTE Corp is seeking a US$10.7 billion credit line from banks as it seeks to rebuild a business that had been crippled by a US supplier ban.
The firm, meanwhile, nominated eight board members in a management overhaul, signaling that it is working toward meeting conditions laid out by the US for resumption of dealings with American suppliers, Reuters reports.
In April, the US imposed a seven-year supplier ban on ZTE after the Chinese telecoms giant broke an agreement to discipline executives who conspired to evade US sanctions on Iran and North Korea.
The ban forced to company to suspend operations before it was offered a reprieve last week.
Under the settlement deal, ZTE agreed to pay a US$1 billion fine to the US government and place another US$400 million in an escrow account in a US-approved bank for 10 years.
Also, it agreed to overhaul its management and hire a US-appointed special compliance coordinator.
As part of its deal, ZTE needs to replace its 14-person board and fire all leadership members at or above the senior vice president level, along with any executives or officers tied to the wrongdoing, Reuters noted.
In filings late on Wednesday, ZTE said its controlling shareholder, Zhongxingxin, had nominated 8 new board members.
That includes 5 non-independent directors and three independent non-executive directors.
Voting on this will take place at an AGM on June 29.
According to a Reuters estimate based on company filings and a source with knowledge of the matter, ZTE’s management overhaul could result in about 40 senior executives being replaced.
ZTE also proposed to amend a company statute at the AGM to remove a clause that required the chairman to be elected from directors or members of the senior officers of the company who had served for three years or more, the report said.
In addition, ZTE proposed to allow the board to apply for a US$10.7 billion credit line, including a 30 billion yuan (US$4.69 billion) from Bank of China and US$6 billion from China Development Bank.
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