BEIJING, Feb. 2 (Xinhua) -- Chinese telecom equipment maker ZTE (000063. SZ) announced on Wednesday that it plans to issue a maximum of 687 million A-shares to raise 13 billion yuan via a private placement plan, according to a company filing released on the Shenzhen Stock Exchange.
Of which, 9.1 billion yuan would be used for technology research and products development relating to 5G network evolution, and 3.9 billion yuan for replenishing the company’s working capitals.
With the 5G era approaching, global operators have announced their plans to promote the development of 5G technology. According to ZTE, the fund-raising will benefit cash flow supplement for business development in the future, and further optimize its capital structure.
It was learned that ZTE has attached great importance to technical research and products development concerning 5G network evolution, and is expected to invest 70 percent of the total amount of raised-funding on it.
The raised-funding via the private placement plan will enhance the company’s research and development capabilities as well as products competitiveness, promote synergetic development of other business of the company, seize the development opportunity for Information Communications Technology (ICT) industry, and boost its profitability and sustainability, according to the company’s filing of ZTE.
By the end of January, ZTE has a market value of about 130 billion yuan, while the issue is limited within 13 billion yuan, not exceeding 10 percent of its market capitalization. An industrial insider said the current additional issuance may save roughly 600 million yuan for itself. (Edited by Ma Xin, Wu Shuang, maxin11@xinhua.org)
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