(Bloomberg) -- Chinese state-owned investment company Guangdong Holdings Ltd. is considering making a potential bid for the China operations of logistics firm GLP Pte, people familiar with the matter said.

The Guangdong local government-backed company is working with advisers to conduct due diligence on GLP’s China assets as it studies possibilities including buying a controlling stake in GLP China Holdings Ltd., the people said, asking not to be identified discussing a private matter.

A potential deal could value the China unit at about 50 billion yuan ($6.9 billion), one of the people said. The unit reported net asset value of $14 billion attributable to the majority shareholder as of end-2023, according to its latest financial statements.

Meanwhile, Guangdong Holdings is also exploring deal options for China Vanke Co.’s 21% stake in GLP, other people said. Details on deal structure and price could still change as the due diligence work is still at preliminary stages.

GLP declined to comment. Vanke and Guangdong Holdings didn’t respond to requests for comment.

Deliberations are preliminary, and there’s no certainty that the parties will decide to move forward with a transaction, the people said. GLP indirectly holds an 84.3% stake in GLP China through a special purpose vehicle called CLH Ltd., according to its 2023 annual report. 

If the deal for the China unit is successful, it would provide state backing for the business, potentially bolstering investor confidence. 

GLP was once an investor darling and has most of its logistics assets in China. But it has faced concerns about its liquidity because of the nation’s property crisis and was stripped of its last investment-grade rating by S&P Global Ratings in November. 

However, the company redeemed two dollar bonds worth more than $600 million in recent months, illustrating its financial resilience, according to a Bloomberg Intelligence analysis.

The price of its 3.875% dollar bond due in June 2025 has recovered from a low of 56 cents on the dollar in October to trade at 87.2 cents on Tuesday.

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