Officials said yesterday that the foreign buyer of a massive State-owned stake in the Changyu Wine Group has yet to be decided.

The 113-year-old Changyu Wine Co is to transfer 43 per cent its State-owned shares to foreign investors to change its solely State-owned status.

A director at the Yantai State-owned Assets Supervision and Administration Commission said: "The final results of the transfer remains far off, and everything is being undertaken to strictly abide by relevant laws and regulations."

The official said Changyu had signed a letter of intent with an Italian wine company last December, and Changyu might transfer its 33 per cent share valued at 400 million yuan (US$48.4 million) to the company.

"But it was just an intent, and many details are still being discussed," the official added.

"The shares could still be transferred to one of the many other foreign companies that have consulted with Changyu over the past two years."

Early last November, Changyu completed the transfer of a 45 per cent share in the firm to the newly established Yuhua Company through management buyouts. Yuhua is controlled by Changyu's top management.

Yantai State-owned Assets Supervision and Administration Commission will continue to own a 12 per cent share in the firm after restructuring.

Experts had predicted in 2003 that French firm Castel is most likely to acquire the share. Changyu and Castel have had relations for a number of years.

Castel has the second-biggest wine sales in the world, boasting more than 3,500 red wine brands, and the largest vineyard in Europe, with an annual sales value of 16 billion yuan (US$1.93 billion).

The official said Castel and a few other foreign companies were still on the list of potential buyers.

Source: China Daily