(Yicai Global) Feb.2 – Chinese electronics maker ZTE Corp. [HKG:0763] has responded to investors' concerns about its recently announced private placement plan, stating that the scheme does not involve big discounts to new investors.
The Shenzhen-based group intends to pool CNY13 billion (USD2.1 billion) through the issuance of up to 687 million shares to support 5G network technology research and product development and provide the Chinese telecoms firm with additional liquidity.
According to the price, shares are priced at CNY19 each, significantly lower than the closing stock price of CNY31.12 on 31. Jan. Some investors suspect the firm company is committing tunneling by significantly discounted stock price.
The price for the private placement has not yet been finalized, ZTE said yesterday in a statement. According to regulations, the final price cannot be lower than 90 percent of the average price of the last 20 trading days leading up to the issue.
Despite ZTE's response, its stock price still dropped by 9.99 percent yesterday, even hitting the down limit, hitting CNY28.01 per share at the cl