ZTE’s market value plummeted today (13 June) as share trading resumed on the Hong Kong and Shenzhen stock exchanges.
The company’s share price dropped more than 41 per cent to HKD14.96 ($1.91) at the end of trading in Hong Kong, wiping about $3 billion off its worth. The pattern was repeated on the Shenzhen exchange, with its share price falling 10 per cent to CNY28.18 ($4.40).
Trading was suspended on 17 April after the US Department of Commerce (DoC) barred US companies from selling components and software to the company.
The falls come a day after ZTE submitted an application for trading to resume. In the document, the vendor said it will restart operating activities “as soon as practicable” after the DoC’s Bureau of Industry and Security (BIS) overturns the seven-year denial order.
ZTE reached a deal with the DoC last week to remove the sanctions, which involves paying a $1 billion fine, placing an additional $400 million in an escrow account with a US bank, appointing a special compliance coordinator and replacing its board of directors.
The vendor must pay the financial penalties within 60 days of agreeing the settlement on 8 June and complete the personnel moves within 30 days. ZTE stated the latter element also involves terminating the employment of all senior executives at or above the SVP level.