ZTE has established a group finance company, ZTE Group Finance Co. Ltd. (ZTEFC), a registered capital fund of RMB 1 billion. The new organization, which is based in Shenzhen, has been approved by the Chinese Banking Regulatory Commission. Mr. Wei Zaisheng, Executive Vice President and Chief Financial Officer of ZTE, will serve as the Chairman of the new establishment.
A signing ceremony for the company’s establishment and partner agreement was held in Shenzhen on July 22 by ZTE Chairman Hou Weigui and Mr. Wei. At the ceremony, Mr. Shi Chunmao, Vice Chairman of ZTEFC, on behalf of the new establishment, signed the strategic cooperation agreement with representatives from five leading Chinese banks including the China Development Bank.
“The establishment of ZTEFC represents a breakthrough in our relationship with the finance industry which will lay the groundwork for the corporation’s future development. ZTEFC will perform its role in financial servicing to enhance the efficiency of the Group’s fund application process and to deepen its pool of financial sources. This will have the effect of minimizing the company’s financing costs and financial risks, while supporting its global growth and development,” stated ZTE Chairman Hou Weigui.
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- Earlier this month, ZTE has secured a US$900 million syndicated term loan from 10 leading international banks. ZTE said that raising the debt in US dollars is an effective way to hedge against the appreciation of RMB.
- In May 2009, The Export-Import Bank of China (China Exim Bank) granted a US$10 billion credit line to ZTE Corporation. Under the cooperation agreement, ZTE and China Exim Bank joined together to establish a financing platform to support ZTE and its holding subsidiaries in overseas market activities including export seller’s credit, export buyer’s credit, import credit, preferential foreign loans, transferred loans of foreign governments and trade financing, as well as other premium financial services. ZTE agreed to deal with China Exim Bank as a principal banker and handle loans and relevant businesses through China Exim Bank.
