(Yicai Global) July 20 -- ZTE won orders worth more than CNY500 million (USD74 million) from China's three largest telecom operators soon after the US lifted a crippling export ban on the telecom equipment maker at the start of this week.
China Mobile, China Unicom and China Telecom released tender documents from July 16 to 17 showing that Shenzhen-based ZTE submitted winning bids for equipment, including switches and routers, 21st Century Business Herald reported. ZTE took the lion's share -- at least 70 percent -- of the tenders.
The US commerce department issued an order on July 15 immediately removing the seven-year ban it imposed on April 15 for ZTE's failure to rectify its earlier violations of sanctions against trading with Iran and North Korea. The department also ordered the firm removed from a list of companies in breach of the Export Administration Act. The ban almost drove ZTE out of business.
In return for an end to the ban, the company and its affiliates agreed to pay a fine of USD1 billion, set aside another USD400 million in an escrow account, and change its board of directors and senior management. The company cleared out its old management team last month.
Getting Back on Track
ZTE will muster all its resources and spare no efforts to move forward after the US lifted its ban, the company pledged in a letter to partners and suppliers on July 16. It asked staff to work weekends starting on July 14, when it resumed operations.
ZTE's Shenzhen-listed shares [SHE:000063] soared by the 10 percent limit for two straight trading days following the end of the ban, amid an otherwise lackluster performance by mainland Chinese shares. They fell almost 2 percent today to close the week at CNY16.52 (USD2.44).
In Hong Kong, ZTE (HKG:0763) gained more than 17 percent earlier in the week before sliding again. They closed down 3.7 percent today at HKD14.64 (USD1.87).
ZTE's new chief executive has also spelled out to employees that compliance is the firm's top priority from now on after it incurred the wrath of US regulators. Xu Ziyang sent a letter to the company's 80,000 staff on July 9, saying its new managers will go all out to ensure a smooth transition and minimize the impact on business.
Editor: Ben Armour