ZTE to apply for $10.7B credit line to recover from US sanctions

Business 6/14/2018, 7:31 AM
ZTE to apply for $10.7B credit line to recover from US sanctions

The Chinese multinational telecommunications giant ZTE will apply for a credit line worth a total of $10.7 billion in an effort to recover from the effects of recent United States sanctions imposed upon the company over an alleged breach of sanctions against Iran and North Korea. According to a statement issued by the company, ZTE will apply for a $4.7 billion credit line form Chinese state-owned Bank of China, while additional $6 billion is supposed to come from the Shenzhen branch of China Development Bank.

The US denial of export and the subsequent temporary shut down of international operations is estimated to have cost ZTE around $2 billion, while the Shenzhen-based company was forced to pay $1 billion as part of a deal to lift the sanctions. The deal also called for ZTE to replace its entire board in 30 days, while US Commerce Secretary Wilbur Ross added that $400 million more would be put in escrow as a precaution and "a very powerful deterrent." Meanwhile, ZTE shares plummeted 38% in Hong Kong on Wednesday, after the deal with the US government was announced.

Breaking the News / FH

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