ZTE Soars After U.S. Signs Deal to Lift Tech-Purchase Ban
ZTE’s shares surged after it inked an agreement with the Trump administration to allow the company to resume doing business with American suppliers, according to Bloomberg.
The Chinese telecoms gear-maker signed an escrow agreement with the Commerce Department and a ban on U.S. technology purchases will lift as soon as ZTE deposits $400 million, the department said in an emailed statement. A person familiar with the matter said the escrow payment should be completed within a day.
ZTE last month took a major step forward in meeting the White House’s conditions by sacking its entire board and appointing a new chairman. Its new management faces the challenge of rebuilding trust with phone companies and corporate customers. But the company is said to be facing at least $3 billion in total losses from a months-long moratorium that choked off the chips and other components needed to make its networking gear and smartphones.
ZTE representatives had met with Commerce Department officials on Monday to discuss a path forward for the deal, people familiar with the meeting said on condition of anonymity.