SHENZHEN-BASED gaming and social media giant Tencent Holdings Ltd. plans to distribute nearly its entire stake in JD.com Inc. to its investors as dividend, retreating from the Chinese e-commerce firm that has been one of its most successful investments.

Tencent said Thursday it will transfer HK$127.69 billion (US$16.37 billion) worth of its JD.com stake to shareholders, slashing its holding in China’s second-biggest e-commerce company to 2.3 percent from around 17 percent now and losing its spot as JD.com’s biggest shareholder to Walmart.

The owner of WeChat, which first invested in JD.com in 2014, said it was the right time for the divestment, given the e-commerce firm had reached a stage where it can self-finance its growth.

Tencent plans to issue 457.3 million A shares of JD.com, representing about 86.4 percent of Tencent’s total stake and nearly 15 percent of JD.com’s total issued shares, by way of distribution in specie to certain qualifying shareholders of Tencent.

Those shareholders who aren’t qualified to get JD.com shares will receive cash, Tencent said.

Martin Chiping Lau, who was Tencent’s representative on JD.com’s board, has resigned as a director given Tencent’s reduced investment in JD.com.

Tencent’s strategy is to invest in companies during their development stage and to exit the investments as the investees become capable of self-financing their future initiatives, Tencent said.

“The board believes that JD.com has now reached such a status, and the board therefore considers that it is an appropriate time to transfer” the majority of the shares to its investors, the company said.

The two firms will continue to maintain their “mutually beneficial business relationship, including via their ongoing strategic partnership,” Tencent said.

(SD-Agencies)