Haier Electronics Group is selling its money-losing mobile handset operation to its parent for $420 million to focus investment on its white-goods business.
The company is in discussions with its parent, Haier Group, on a series of possible asset injections as part of the plan to transform Haier Electronics into the group's listed flagship of the white-goods business.
Haier Electronics said it had struck a deal with Qingdao Haier Group Holdings, a subsidiary of Haier Group which is the controlling shareholder of the Hong Kong-listed firm, giving the company a disposal gain of $90 million.
Shares in Haier closed at 32 cents before they were suspended from trading on Thursday pending the release of an announcement.
The company sank into the red with net loss of $433 million last year because of its poor performance in the mobile-handset business.
Following the sale, Haier Electronics will focus its business on the production, sale and distribution of washing machines under the Haier brand.