Gift company Yip's Pota International says its controlling shareholder Pedaro International is to sell a 32 per cent stake in the company for $26.75 million under a non-binding agreement.
Pedaro, which holds a 46.57 per cent stake, is proposing to sell the shareholding to Great Smart, controlled by Chan Hon-keung, a Hong Kong resident with strong links to Weihai city in Shandong.
The transaction comes in the wake of a net loss reported by Yip's Pota of $19.7 million for last year.
The change of shareholders is subject to the seller refraining from entering into any other negotiations for the sale of the shares until the signing of a formal agreement on August 31.
Get Smart also confirmed it would not proceed with the transaction should it have to make a general offer for the company.
Pedaro said it would sell 70.4 million shares to Great Smart at 38 cents a share.
