(Yicai Global) Feb. 11 -- The chairman and owner of chemicals and steel manufacturer Fangda Group Industrial, which bought a majority stake in debt-laden Hainan Airlines late last year, is preparing to buy back as much as CNY198 million (USD31 million) worth of shares in order to drum up investor enthusiasm for the languishing stock.

Fang Wei, who holds 24.95 percent equity in the carrier, plans to repurchase between 50 million and 100 million shares over the next six months to increase his stake by between 0.15 percent and 0.30 percent, Hainan Airlines said yesterday. Although there is no maximum price set for the repurchase, based on today’s closing price of CNY1.98 (USD0.31), he could spend as much as CNY198 million.

In September last year, Fangda Group submitted the winning bid of CNY38 billion (USD6 billion) for a controlling stake in Hainan Airlines, which had run up huge levels of debts under its previous owner HNA Group.

However, the carrier, which is the country’s fourth largest airline, is struggling to get back on its feet due to the Covid-19 pandemic and revenue is only at 40 percent of pre-pandemic levels. The company is expecting to rack up losses of as much as CNY10.5 billion (USD1.6 billion) last year, the Haikou-based airline said in its latest earnings forecast last month.

Hainan Airlines’ share price [SHA:600221] closed up 2.06 percent at CNY1.98 today. Earlier it had surged 5 percent, the exchange-imposed daily limit for companies at risk of listing, to CNY2.04, the highest point this year.

Editor: Kim Taylor