BRIEF: ZTE to raise $500 million through convertible bond issue

Telecoms equipment maker ZTE Corp. (0763.HK; 000063.SZ) announced on Tuesday that it plans to issue 3.58 billion yuan ($499 million) worth of zero-coupon, U.S. dollar-settled bonds with the option to later convert them to its Hong Kong-trades shares. The company will use proceeds for its computing power product R&D.

The bonds will mature on Aug. 5, 2030, with an initial conversion price of HK$30.25, representing a premium of 15.9% over the stock’s last closing price before the announcement. If fully converted, the bonds would translate into about 130 million Hong Kong shares, equivalent to approximately 2.64% of ZTE’s enlarged total share capital.

In the first quarter of this year, ZTE’s revenue rose 7.8% year-on-year to 33 billion yuan, while its net profit fell 10.5% to 2.45 billion yuan.

ZTE’s stock opened 2.8% lower on Tuesday in Hong Kong and closed at HK$25 by the midday break, down 4.21%.

By Lee Shih Ta

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