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Reuters Staff

SHANGHAI (Reuters) – Hainan Airlines (600221.SS) plans to sell a fifth of its preference shares in Brazil’s Azul SA (AZUL.N) to United Continental (UAL.N) subsidiary Calfinco for $138.3 million.

The flagship carrier of HNA Group  said on Friday it was selling the shares as it expects to make a $42 million profit following Azul’s initial public offering in 2017.

This would boost the firm’s financial results and allow it to maintain good asset liquidity, it added.

Hainan Airlines paid $450 million for a 23.7 percent stake in Azul in 2016. As of April 24, it held 22.4 percent of the Brazilian airline’s preferred shares or a 21.6 percent economic stake, according to Azul’s website. It said its economic stake would fall to 17.28 percent after the deal.United Continental said in a separate statement that the deal would lift Calfinco’s economic stake in Azul to 8 percent, from 3.8 percent previously.

HNA, the aviation-to-financial services conglomerate, has been selling overseas real estate and some of its biggest financial and strategic investments following a $50 billion acquisition spree over the past two years.

Hainan Airlines said in a separate statement to the stock exchange on Friday that it plans to issue up to $1 billion in offshore bonds.