(Yicai Global) Feb. 17 -- China Aoyuan Group, a real estate developer that is restructuring its debt, plans to sell part of its property management company to a Guangzhou local government fund at a 35 percent discount.

Aoyuan will sell nearly 30 percent of Aoyuan Healthy Life Group for HKD256 million (USD32.6 million), or HKD1.18 (15 US cents) a share, the Guangzhou-based builder said late yesterday. Best Discovery International, controlled by state-backed Guangzhou Nan Yue Fund Group, is the buyer.

Aoyuan Healthy Life's shares [HKG: 3662] closed at HKD1.86 on March 31 last year, before it was suspended from trading along with Aoyuan for failing to disclose its financial results in time. The transaction will result in a loss of about HKD44.8 million for Aoyuan, the firm said.

The stake sale is part of Aoyuan's debt restructuring aimed at boosting its liquidity and reducing its debt burden, according to the company. Nan Yue Fund can provide financial resources and investment advice, it added.

Nan Yue Fund will become Aoyuan Healthy Life's biggest shareholder after the transaction, followed by Aoyuan at 24.7 percent.

Aoyuan put together a debt restructuring plan after defaulting on nearly USD1.1 billion in debt in January last year. Its aim to bring in state-backed investors is still progressing, insiders told Yicai Global.

Editors: Dou Shicong, Martin Kadiev