(Yicai) June 13 -- China Vanke has sold all of the shares that it repurchased about three years ago to comply with a regulatory requirement, losing about CNY813 million (USD113.2 million) in the process because the debt-laden property developer’s stock price has plunged since then.

Vanke raised CNY480 million (USD66.8 million) by selling nearly 73 million treasury shares -- the equity a company buys back from shareholders but does not cancel -- at CNY6.48 to CNY6.72 (90 US cents to 94 US cents) each through centralized bidding between June 10 and yesterday, it said yesterday. When costs are factored out, the firm raised CNY479 million from the sale.

Shenzhen-based builder paid about CNY1.3 billion (USD181 million) for them between March and June 2022, shelling out CNY17.01 to CNY19.27 (USD2.37 to USD2.68) apiece, in an attempt to slow the decline in its stock price. Buybacks are generally aimed at buoying a company’s stock price by removing some of its shares from the market. 

Vanke [SHE: 000002] ended 1.1 percent lower at CNY6.44 in Shenzhen today.

Under Chinese regulations, repurchased shares must be sold within 36 months of a buyback’s completion or be canceled, the company noted. In the case of Vanke’s treasury shares, the deadline was June 30 this year.

Despite the loss incurred on their sale, the funds raised will help ease some of Vanke’s liquidity strain during its heaviest debt repayment period. As of May 31, the developer had nearly CNY21.8 billion (USD3 billion) of onshore and offshore debt maturing through the end of this year, according to a report by China Chengxin International Credit Rating.

This month and next, the firm has four bonds coming due, amounting to CNY7.6 billion (USD1.1 billion), per data from Wind Information. The pressure will peak in July, when CNY5.9 billion falls due.

Vanke’s largest shareholder, Shenzhen Metro Group, has provided the company with five loans worth a total of CNY14.9 billion (USD2.1 billion) since February to help it repay debt.

Editors: Tang Shihua, Futura Costaglione