The Chinese government's science institution wants to sell its 29 percent share in Lenovo's parent company, potentially putting more control of the company in the hands of private investors.
The Chinese Academy of Sciences, which is a state-run institution that conducts national research projects, is asking 2.76 billion yuan (US$404 million) for the piece of its stake in Legend Holdings, Lenovo's parent company, a spokesman for the academy's investment arm said Tuesday. The sale would bring the academy's stake in Legend down to 36 percent from its current 65 percent, he said.
The academy wants a buyer with experience in areas like capital management and marketing, which are not covered by the state-run academy's technical expertise, the spokesman said.
The buyer must agree not to resell its stake, alter Legend's strategy or propose changes to the company's executive base for five years, the academy said in a statement. The company must have registered assets of at least 4 billion yuan and cannot be backed by foreign investors.
The academy does not currently plan to reduce its stake further, the spokesman said. Lenovo declined to comment.
Lenovo began restructuring this year to build its focus on China and other emerging markets after its enterprise sales in Western countries took a severe blow from the economic recession. The company, the world's fourth-largest PC maker, announced last week a quarterly net loss for the three months through June 30. The figure was an improvement from Lenovo's larger net loss in the previous quarter, but still stood far below the company's net profit of $110 million a year earlier.