Shenzhen-based telecom-equipment giant ZTE Corp is cashing out of its property assets in a creative way to address a liquidity crunch after the US$1.4 billion fine imposed last year by the US, reports Caixin Global.
ZTE acquired the land use rights of a plot in Shenzhen Bay Super Headquarters Base for RMB3.54 billion in 2017. It has reached an agreement with Shenzhen-based developer Vanke to develop it into a commercial complex as its new headquarters. Much of this land, however, is non-transferable according to the terms of the land acquisition. Where there is a will there is a way, however, and so ZTE has reportedly signed a supplementary agreement with Vanke to grant it more operational rights; in return, Vanke has agreed to bear all the costs for development and construction.
Vanke was said to have paid ZTE a total of RMB3.54 billion, enough for the company to recover the cost of the land acquisition. Vanke is scheduled to pay an additional RMB1.8 billion to ZTE by 2023.