ZTE chiefs approved a plan to seek credit facilities totalling $6.8 billion from two Chinese banks during its AGM.

In a statement, the company said it sought CNY20 billion ($2.8 billion) in credit from the Bank of China along with $4 billion in loans from China Development Bank to cover loans, acceptance bills, guarantees, letters of credit and trade financing.

Both moves require the banks’ approval, ZTE stated.

The company returned to profit in 2019, reporting net income of CNY5.15 billion compared with a CNY6.98 billion loss in 2018 when it was hit by a $1 billion penalty imposed by the US, along with operating losses and provisions related to the suspension of its business.

But it took a hit in the opening quarter of this year due to Covid-19 (coronavirus) lockdown measures, with both profit and revenue declining despite increasing capacity to match stronger-than-expected demand for 5G equipment.

The vendor scored a string of major 5G wins in the mainland over the past few months. It was awarded 33 per cent of a massive standalone tender by China Unicom and China Telecom, and 28.7 per cent of a second-phase move by China Mobile.

ZTE also took 45 per cent of China Telecom’s 5G core network tender and almost 30 per cent of China Unicom’s.