ZTE Corp is receive 301 million yuan ($44.1m) in subsidies from the Chinese government, the company has announced.
The vendor said in a statement that it would receive up to 82.7 million yuan for the 2009 financial year and the balance in the current year.
ZTE said it had not yet received any of the grants, and timing of the payments and total amounts paid would “depend upon the actual progress of the projects.”
It did not specify what the subsidies were for or which government agencies would be paying them. The Chinese government has set aside billions of yuan to pursue its “indigenous innovation” program covering technologies such as TD-SCDMA and machine-to-machine systems.
In widespread speculation in mainland media and blogs about the news, National Business Daily said that ZTE would begin exercising warrants on February 1, possibly raising up to 2.55 billion yuan.
However, the company’s price on the Shenzhen B board has been trading below the warrant price, the paper noted, “giving pause for thought.” The stock closed on Friday at 43.39 yuan, 2% above the warrant price, NBD said.