ZTE Seeks $10B In Financing, Ejects Board Over U.S. Issues

ZTE proposed a $10.7 billion financing plan and effectively resolved to eject its existing board of directors in the aftermath of its new settlement with the United States Commerce Department reached earlier this month. After being hit with a seven-year denial order banning it from obtaining any kind of American technologies, the China-owned firm managed to save itself from certain bankruptcy by replacing that sanction with a $1 billion fine going up to $1.4 billion and a variety of other concessions, including major management and board changes.

Over a quarter of all components and licenses purchased by ZTE come from the United States and the majority of them can only be obtained stateside, with something like an up-to-date version of Android with Google's apps not having a realistic alternative. ZTE yesterday saw some $3 billion of its value erased after U.S. lawmakers signaled they may attempt reversing President Trump's lifeline deal, though its shares started recovering following the disclosure of its rough comeback plan. The company is now starting its efforts to rebuild its reputation after losing out on a number of contracts since the Commerce Department first hit it with its latest denial order in April and seeing a number of already agreed ones canceled following the ordeal. A White House adviser recently said President Trump lent ZTE a helping hand as a sign of goodwill toward China that's presently negotiating much broader trade deals with the United States.

The Shenzhen-based company will soon be hiring a Washington-appointed compliance coordinator for an indefinite period as part of the same deal which replaced a 2017 settlement over its violations of international trade sanctions placed on North Korea and Iran. ZTE hasn't fully complied with the previous agreement, having failed to discipline some of its employees, with the Commerce Department also accusing it of lying to its investigators. The company said it self-reported its non-compliance, attributing it to an omission, hence arguing the seven-year denial order was too harsh of a reaction to the development.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
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