HUAWEI Technologies Co. plans to sell its 51 percent stake in undersea telecommunications cable business Huawei Marine Systems Co., according to an exchange filing from the buyer yesterday.

Hengtong Optic-Electric Co., an optical communication network products company based in eastern China’s Jiangsu Province, said in the filing to the Shanghai Stock Exchange that it signed a letter of intent with Huawei Technologies subsidiary Huawei Tech Investment Co. on Friday to buy the stake via cash and share issuance. It did not mention a price.

Huawei Technologies declined to provide immediate comment when contacted. Trading of Hengtong Optic-Electric shares was suspended yesterday pending deal discussions.

The potential sale comes as Huawei Technologies’ main business of selling telecom network equipment and smartphones is under intense global scrutiny as the United States alleges its products pose a security risk. Huawei has denied the allegations.

Last month, Huawei was slapped with a trade ban by the U.S. Commerce Department that threatens to significantly disrupt its supply chain, though it has since been given a temporary reprieve.

Huawei Marine, established in 2008 as a joint venture with Britain’s Global Marine, is mainly engaged in the construction of global undersea communications cables.

According to Huawei Technology’s annual report, the tech giant gained majority voting rights on the board of Huawei Marine in August 2018 with Global Marine retaining a 49 percent non-controlling interest.

Huawei Marine contributed revenue of 394 million yuan (US$57.10 million) and logged a net profit of 115 million yuan in 2018, according to Huawei Technologies’ annual report.

(SD-Agencies)