LIVZON Pharmaceutical Group Inc, a Chinese drug maker, announced plans to buy back Hong Kong dollar-denominated shares, possibly establishing a method for Chinese companies to merge their hard-currency and yuan stocks.

The company, based in Zhuhai, Guangdong Province, will spend as much as HK$160 million (US$20.5 million) to buy back about 10 million Class-B shares, according to a Shenzhen Stock Exchange filing yesterday. Livzon's board approved the plan, now subject to a shareholders' vote scheduled for June 20, it said.

China's B shares, introduced in 1992 to give overseas investors access to mainland-listed firms, have lost appeal since 2002, when the government started letting foreigners buy stocks in the bigger, more liquid A-share markets.

"It's a positive sign for B shares as something is now being done to try to improve the marginalized market," Sun Chao, an analyst at Citic Securities Co in Shanghai, said in a phone interview with Bloomberg News yesterday. "The buyback could provide a way to address the hangover of B shares."

Livzon will use its own money to buy back the shares for no more than HK$16 each within 12 months through the Shenzhen exchange, the statement said.

Class-B shares are traded in US dollars in Shanghai and in Hong Kong dollars in Shenzhen. B shares, previously limited to overseas investors, were opened to domestic individuals in 2003.