GREE Electric Appliances surged by the daily limit after its State-owned parent seeks to sell almost its entire stake in China’s biggest maker of air conditioners, a move that analysts said will further improve corporate governance.

The shares jumped by 10 percent to 51.93 yuan in Shenzhen yesterday, as the stock resumed trading after being suspended over the past five days. Zhuhai Gree Group, Gree Electric’s biggest shareholder that owns 18.2 percent of the company, plans to sell a 15-percent stake, the appliance maker said in an exchange filing, without identifying buyers. The deal will be worth at least 41.3 billion yuan (US$6.15 billion), given the statement said the stakes will be sold for no less than the average stock price over the past 30 trading days.

Brokerages including CITIC Securities hailed the plan that will lead to a change of the ownership, saying it will improve Gree’s operating efficiency and address the governance issue between the parent and the company.

Zhuhai Gree Group has been gradually exiting from the listed company over the past decade, with its interest dropping from a controlling 60 percent and the shares transferred to dealers and senior executives.

Gree Electric remains one of the favorites among foreign investors, who held a combined 7.9 percent stake through the exchange link program by the end of the third quarter.

(SD-Agencies)