(Yicai Global) June 8 -- Shandong Airlines is set to enter the Shenzhen Stock Exchange’s delisting procedure after having had negative net assets for two years in a row.

Shandong Airlines yesterday received notice from the bourse informing the Jinan-based carrier that the delisting procedure will start on June 15 and its stock will be removed from the exchange on July 7.

The airline’s shares [SHE: 200152] halted trading on April 28, when they closed down 3 percent to CNY2.94 (38 US cents) each.

Shandong Airlines had negative net assets of CNY7.8 billion (USD1.1 billion) last year and CNY917.7 million (USD128.7 million) in 2021. Moreover, the company lost money over the three years of the Covid-19 pandemic, with its net losses reaching CNY6.9 billion, CNY1.8 billion, and CNY2.4 billion, respectively, between last year and 2020.

In the first quarter of this year, the firm narrowed its net loss nearly 64 percent to CNY470 million from a year earlier, as China’s airline industry has been getting back on its feet since the country lifted Covid-19 restrictions.

Shandong Airlines’ investors have tried to pull it out of insolvency. The major backer of Air China, the biggest Chinese stated-owned carrier, raised its stake and injected CNY10 billion into Shandong Airlines’ parent company, Shandong Aviation Group, along with the second-biggest shareholder Shandong Hi-Speed.

Last December, Air China bought CNY33 million shares of Shandong Aviation from other investors to hike its ownership of Shandong Aviation to 51.7 percent from 49.4 percent.

More importantly, Air China and Shandong Hi-Speed stumped up CNY66 billion and CNY34 billion, respectively, to boost Shandong Aviation’s registered capital. The two big shareholders aim to help the local airline maintain normal operations.

Editor: Futura Costaglione