(Yicai) July 15 -- Rastar Group’s shares advanced after the Chinese toy maker and online games developer said the firm will sell its entire stake in unprofitable Spanish soccer club Reial Club Deportiu Espanyol de Barcelona for EUR130 million (USD151.8 million).

After jumping by as much as 7.4 percent in Shenzhen earlier today, Rastar [SHE: 300043] closed up 3.6 percent at CNY4.87 (68 US cents) a share.

Rastar's two wholly-owned units in Hong Kong will sell their 99.7 percent of RCD Espanyol to Velocity Sport Limited, the Guangzhou-based firm announced yesterday. Half of the transaction will be paid in cash and the other half in newly issued shares of VSL, giving Rastar a 16.45 percent stake in the UK investment fund.

The sale is expected to generate a net profit of about CNY150 million (USD20.9 million), Rastar noted, adding that divesting from the soccer club will also allow the company to concentrate its resources on core businesses, including developing and publishing online games.

The deal includes a buyback option. Two years after the sale, Rastar has the option to require VSL to repurchase 6.33 percent of those new shares for EUR27.5 million (USD32.1 million). If exercised, the cash payment would be adjusted to EUR82.5 million (USD96.3 million), and Rastar's stake in VSL would drop to 10.12 percent.

As part of the agreement, RCD Espanyol must also repay a EUR7 million (USD8.2 million) shareholder loan to the seller by the end of August next year.

VSL’s majority owner is ALK Capital, a US-based business that specializes in acquiring and operating sports, media, and entertainment assets. It is the majority owner of Burnley Football Club, an English team that has just been promoted to the Premier League.

"With this managerial step forward, Rastar underlines a firm conviction that this integration into the VSL group will strengthen both the economic and sporting structure of RCD Espanyol," the Spanish soccer club said in the announcement on its official website yesterday.

RCD Espanyol lost CNY261 million (USD36.4 million) last year and CNY37.2 million (USD5.2 million) in the first five months of this year, according to financial data provided by Rastar.

Editor: Futura Costaglione