ZTE tips $225m into two new units

Dylan Bushell-Embling
14 Oct 2010
00:00

ZTE has announced plans to invest 1.5 billion yuan ($225.1m) to establish a finance subsidiary and a company to run its new plant at Heyuan, east Guangdong.

The Chinese vendor revealed in a filing to the HKSE that it will create ZTE Finance, a limited liability company with a registered capital of 1 billion yuan.

The unit will handle deposits, loans, payments and receipts and other financial matters for ZTE.

ZTE, which has around 12.3 billion yuan worth in bank balances and reported 140.4 billion in cash flow in 2009, said it needed to centralize treasury management of to improve efficiency and lower capital costs.

In a separate filing, ZTE said it would form ZTE Heyuan, a 500 million yuan company that would operate a new production and R&D facility in the Heyuan Hi-Tech Development Zone.

The 10 billion-yuan project is scheduled for completion in six years..

Both new companies will be funded through existing cashflow, and be 100%-owned by ZTE. Both projects require the approval of the China Banking Regulatory Commission.

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