A retail outlet of Lenovo, China's largest computer manufacturing company, in Beijing. US computer giant IBM Corp plans to sell a substantial part of its stake in China's Lenovo, the world's third-largest personal computer group. [AFP]

HONG KONG - US computer giant IBM Corp plans to sell a substantial part of its stake in Lenovo, the world's third-largest personal computer group, raising up to 990 million Hong Kong dollars (127 million US).

According to a term-sheet sent to institutional investors, the sale price of the 300 million shares on offer will be 3.20-3.30 dollars each, a 4.07-6.98 percent discount to the stock's closing price of 3.44 dollars on Monday.

The deal, arranged by Citigroup, accounts for 3.5 percent of Lenovo Group's total issued share capital.

After the share sale, IBM's shareholding in Lenovo will be reduced to 11.5 percent from 15 pct currently.

Lenovo bought IBM's personal computer business in December 2004 for 1.25 billion US dollars, of which 600 million dollars was satisfied by the issuance of shares at 2.675 dollars each.

Lenovo also requested a suspension of trade in it shares Tuesday pending an announcement of "price-sensitive information" relating to the placing of the company's shares by a substantial shareholder, according to a statement posted on the Hong Kong stock exchange.

Further details were not immediately available.