Smartphone maker Xiaomi to buy back shares up to $1.3 billion

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(Reuters) - China’s smartphone maker Xiaomi Corp said on Thursday it will buy back shares up to HK$10 billion ($1.29 billion) on the open market under a repurchase program, even as its stock price continues to slump.

Xiaomi’s shares have lost more than a third of their value since the company was blacklisted by the United States in mid-January for its alleged ties to the Chinese military, which mandatorily forces American investors to divest their holdings.

“The board believes that a share repurchase in the present conditions will demonstrate the company’s confidence in its own business outlook...and create value to the shareholders,” Xiaomi said in a statement.

The company’s board had approved a resolution to buy back a maximum of 10% of its shares in June last year, worth about HK$31 billion at the time.

($1 = 7.7590 Hong Kong dollars)

Reporting by Anushka Trivedi in Bengaluru; Editing by Krishna Chandra Eluri