U.S. extends ZTE reprieve on exports curbs until Feb. 27
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The ZTE company logo is seen as a guest delivers a speech during the company's 15th anniversary celebration in Beijing April 18, 2013. REUTERS/Barry Huang
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HONG KONG (Reuters) - Chinese telecoms equipment group ZTE Corp said on Friday it has won a further reprieve to Feb. 27 on export restrictions that were imposed on the company by the U.S. government.
In March, the U.S. Commerce Department hit ZTE with some of the toughest-ever U.S. export restrictions for allegedly breaking sanctions against Iran but has since issued temporary reprieves on the curbs.
The latest reprieve comes after ZTE said this week it had appointed Matthew Bell as its new chief export compliance officer based in the United States.
If imposed, a ban for U.S. component makers and software firms to do business with ZTE could cut off much of the Chinese network equipment and smartphone maker's supply chain.
ZTE's Hong Kong shares closed down 1.9 percent on Friday and is down 35 percent for the year to date due to uncertainty over the export restrictions.
UOB Kay Hian (Hong Kong) analyst Cindy Lam said the key catalyst for the stock would be a permanent removal of the ban, which will likely result in a small one-off penalty payment for ZTE.
Speculation arose earlier this year that ZTE might switch to non-U.S. component suppliers after the ban, but the fact that it was continuing to source chipsets from Qualcomm Inc was proof to some analysts such as Lam that ZTE was not switching suppliers and would work toward getting the ban lifted.
"There's a high chance that there will be a permanent removal of the US export restriction," Lam said in an email.
ZTE said it will continue to cooperate with the relevant U.S. government departments to reach a final solution on the matter and strictly comply with relevant U.S. laws.
(Reporting by Donny Kwok; Additional reporting by Sijia Jiang; Editing by Edwina Gibbs and Muralikumar Anantharaman)
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