Huawei, from China, will sell its submarine cable business

The Chinese Huawei Technologies plans to sell its 51% stake in the submarine telecommunications cable business Huawei Marine Systems, announced Monday an exchange of information from the Chinese buyer.

Hengtong Optic-Electric, an optical communication network products company based in Jiangsu Province, said in a statement to the Shanghai Stock Exchange that it has signed a letter of intent with Huawei Tech, a subsidiary of Huawei Technologies, the May 31 issue. He did not mention a price.

Huawei Technologies declined to provide immediate feedback when contacted by Reuters. Trading in Hengtong Optic-Electric shares was suspended on Monday pending talks on the deal.

The potential sale comes as Huawei Technologies' main business of selling telecommunication network equipment and smartphones is being scrutinized globally, with the United States claiming that their products are a security risk. Huawei denied the allegations.

Last month, the US Department of Commerce imposed a trade ban on Huawei, which threatened to severely disrupt its supply chain, even though it has since enjoyed a temporary stay.

In March, the Wall Street Journal quoted US security officials as saying that Huawei's submarine cables could be exposed to espionage by the Chinese state, which the company denied.

Huawei Marine, created in 2008 as a joint venture with UK-based Global Marine, is primarily focused on the construction of global submarine communication cables.

According to Huawei Technology's annual report, the technology giant obtained the majority voting rights of Huawei Marine's board of directors in August 2018, with Global Marine retaining a 49% minority stake.

Huawei Marine generated revenues of 394 million yuan (57.10 million US dollars) and posted a net profit of 115 million yuan in 2018, according to Huawei Technologies' annual report.