June 12, 2018 / 11:35 AM / a year ago

Acacia says ZTE business to remain suspended until ban lifted

FILE PHOTO - Visitors pass in front of the Chinese telecoms equipment group ZTE Corp booth at the Mobile World Congress in Barcelona, Spain, February 26, 2018. REUTERS/Yves Herman

(Reuters) - Acacia Communications Inc said on Tuesday its supply agreement with ZTE Corp would remain suspended until the U.S. Department of Commerce lifted a trade ban on the Chinese telecommunications equipment maker.

The Chinese company reached a $1.4 billion (1 billion pounds) settlement with the Commerce Department, made public on Monday, to resume business with U.S. suppliers.

But the ban on buying U.S. parts, imposed by the department in April, will not be lifted until ZTE pays the fines and places $400 million (298.8 million pounds) more in an escrow account in a U.S.-approved bank.

ZTE said on Tuesday its shares would resume trading on the Hong Kong stock exchange on June 13 following its settlement with the United States.

Acacia said the settlement may ultimately allow it to resume ties with ZTE.

The U.S. company’s shares have fallen 13 percent since the ban was imposed in April.

Reporting by Sonam Rai and Laharee Chatterjee in Bengaluru; Editing by Saumyadeb Chakrabarty

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