Sanjiu Enterprise Group, which makes the well-known '999' brand of medicines in the mainland, probably will sell its subsidiaries to repay debt, market sources said. Sanjiu Enterprise was one of the 17 companies that failed to return 9.2 billion yuan of misappropriated funds to their listed units before the deadline last year, according to the China Securities Regulatory Commission. The Shenzhen-based drugmaker owed about 3.74 billion yuan, more than 40 per cent of the total, the CSRC said. 'The company had been in discussions with foreign investors, including private equity funds, on selling its subsidiaries a few years ago,' a market source said. 'Selling subsidiaries on one hand can repay the debt. It is also a way to avoid foreign investors becoming [the company's] controlling shareholder.' The company's Shenzhen-listed unit Sanjiu Medical in a statement yesterday said that it was in talks with investors including Deutsche Bank about restructuring. Michael West, a Hong Kong-based spokesman for Deutsche Bank, declined to comment. The company is also talking to China Resources Group, Fosun Group and consortiums led by Shanghai Industrial Investment Holdings and New World Group, the statement said. Sanjiu Enterprise said it would pick a strategic investor by the end of this month. Zhou Hui, the board secretary of Sanjiu Medical, said the listed company would not sell shares to strategic investors as part of restructuring. Debt-laden state-owned enterprises tended to rely on domestic banks for restructuring bad debt and asset sales in the past. However, as many major banks listed shares, they became reluctant to take on such risks, an analyst said. 'On the other hand, foreign investors are still drawn to becoming strategic investors of state firms, thinking that with extensive distribution networks and fat profit margins, it is possible to achieve a turnaround,' the analyst said.