FILE PHOTO: People walk past a ZTE logo outside its booth at the Mobile World Congress in Barcelona, Spain, Feb. 25, 2019. REUTERS/Sergio Perez/File Photo
HONG KONG (Reuters) – Chinese telecom equipment maker ZTE Corp’s controlling shareholder plans to reduce its stake by as much as 3 percent after the stock more than doubled in value since surviving a U.S. sanction last year, showed regulatory filings late on Tuesday.
The stock slumped as much as 7.6 percent in Shenzhen on Wednesday following the news. Its Hong Kong-listed shares dropped as much as 5.6 percent.
The Chinese firm was crippled early last year after breaking U.S. sanctions and was only able to resume business in July after paying $1.4 billion in penalties to lift a U.S. supplier ban. The stock has since risen around 150 percent in Shenzhen.
ZTE in the filings said state-owned controlling shareholder Zhongxingxin Telecom plans to sell up to 2 percent in ZTE A-shares via block trades within 90 days. Zhongxingxin has also proposed to use not more than 41.9 million ZTE A-shares, or 1 percent of the company’s total share capital, to subscribe for units in the ICBCCS SHSZ 300 exchange-traded fund.
Reporting by Sijia Jiang; Editing by Christopher Cushing