CHINA / National
Air China announces buyback to shore up share price
(AP)
Updated: 2006-08-23 10:19
SHANGHAI - Chinese flag carrier Air China Ltd. said Wednesday its
state-owned parent company bought back 122.87 million of its shares on
the Shanghai Stock Exchange as of Monday, as part of efforts to shore up
its stock price following a weak IPO debut.
The share buyback represents 1.11 percent of the airline's total
capitalization, Air China said in a statement.
Air China's parent, China National Aviation Holding Co., promised to buy
up to 600 million Air China shares on the stock exchange to support the
share price if it falls below the initial public offering price of 2.80
yuan (35 U.S. cents; 27 Euro cents) at any time before the end of the
year.
The flag carrier's A shares ended unchanged on their debut Friday after
dipping as low as 2.74 yuan, weaker than market expectations of a 5
percent to 10 percent gain for the day.
A flood of new share offerings after a yearlong moratorium for
shareholding reforms has sapped demand. Meanwhile, airline shares in
general have suffered from a poor earnings outlook due to soaring fuel
prices.
Air China's shares remained at 2.80 yuan on Monday and were suspended
Tuesday because of a shareholders' meeting.
The airline also has shares traded on the Hong Kong Stock Exchange.
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