ZTE Corp, China's second biggest telecoms equipment maker, said on Friday that US investment bank Goldman Sachs had bought 2.25 per cent of the company's issued share capital.

ZTE said in a statement that Goldman's subsidiary Jade Dragon (Mauritius) Ltd had bought 21.57 million non-traded legal person shares of ZTE from Fortune Trust & Investment Co Ltd.

The company did not give the dollar value of the stake sale, but based on the firm's market capitalization of HK$22.26 billion (US$2.85 billion) as at midday on Friday, a 2.25 per cent stake would be worth around HK$500.9 million (US$64.2 million).

The mainland-based Fortune Trust had ceased to hold any shares in ZTE, the statement added.

ZTE said Jade Dragon had also agreed to participate in possible company's state-share reform in the future. It gave no further details.

Beijing in April revived a controversial programme to float US$250 billion of non-traded state holdings in listed firms, aimed at making firms more transparent and financing a patchy pension system.

A legacy of a centrally planned economy, state shares directly controlled by governments at all levels or institutions they control account for two-thirds of the US$415 billion capitalization of the Shanghai and Shenzhen stock exchanges.

In October, ZTE reported a 27.4 per cent fall in the third quarter profit to 154.83 million yuan based on Chinese accounting standards as weak capital spending by telecoms firms outweighed strong exports.

Shares of ZTE, which have fallen 10.4 per cent over the past three months, rose 0.87 per cent to HK$23.20 by the midsession on Friday.

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