Hong Kong-listed Sega.com Asia plans to retreat from Internet business by selling its online games concerns back to United States-based controlling shareholder Sega.com (Sega US). Sega.com Asia said it planned to sell the entire stake of its Web games venture Asia Networks and its related shareholder loans to Sega US, which owns a 34.5 per cent shareholding in the Hong Kong subsidiary. Asia Networks was established last February. It aimed at joining the Internet frenzy, then at its peak, by distributing the Dreamcast games console of Japan-based games-maker Sega Enterprises. Sega.com said it would also sell its 6.8 per cent interest in PC Networks, which operates an online games Web site called Heat.net in the US, to the American parent. In return, Sega US would settle the deal by paying US$480,000 and transferring its 34.5 per cent interest back to the Hong Kong company. The settlement would lead to a change of shareholding structure since, upon the completion of the deal, the transferred shares would be cancelled, meaning the portion owned by managing director Brian Lui Shing-ming and his related parties would increase from 21.2 per cent to 32.4 per cent. Sega.com said the main reason for the sale was the worldwide downturn in technology stocks which had adversely affected the launch plan of its online games business. The company said the downturn had made it difficult to raise new funds to finance the online business. Moreover, both Asia Networks and PC Networks had recorded substantial losses since their establishment last year. Asia Networks had a loss of more than HK$10 million between February 28 and December 31 last year. PC Networks had a capital burn rate of US$18 million between January and December. Sega.com, formerly packaging printer and manufacturer Cheong Ming Holdings, jumped on the Internet bandwagon by introducing Sega US as its major shareholder by a share-swap arrangement last February. The US firm is the Internet arm of Japan-based games maker Sega Enterprises, which owns 52 per cent.