BEIJING, May 21 (Reuters) - Chinese construction equipment maker Zoomlion Heavy Industry Science and Technology Co Ltd said on Sunday it would sell 80 percent of its environmental equipment unit to a group of four companies for 11.6 billion yuan ($1.7 billion).
Guangdong-based conglomerate Infore Holding agreed to buy 51 percent of Changsha Zoomlion Environmental Industry Co, with Hony Capital acquiring 21.6 percent, according to a filing with the Hong Kong stock exchange.
Shanghai Lulian Junhe Industrial Equity Merger and Acquisition and Investment Fund Partnership, an investment company set up by Zoomlion, and Guangzhou Yuemintou Yinglian Investment Fund Partnership each agreed to buy less than 5 percent stakes in the environmental unit.
“We want to focus on engineering and agricultural equipment,” Zoomlion board secretary Shen Ke said on a conference call prior to the exchange filing.
Environmental equipment could hold back the development of those areas by competing for resources, he said.
“The overall performance of the company is at a relatively low point. Market value has also dropped to a low,” Shen said. “Selling (this) controlling stake can help maximize the value of Zoomlion.”
$1 = 6.8830 Chinese yuan renminbi Reporting by Hallie Gu and Jake Spring; Editing by Mark Potter