State-owned China National Tobacco Corp. is selling its stake in a joint venture in Brazil to its Hong Kong subsidiary, China Tobacco International (HK) Co. Ltd, the subsidiary says.

China Tobacco International (HK) told the Hong Kong Stock Exchange that it would pay China National Tobacco US$63.4 million for the stake of 51 per cent that the parent company holds in China Brasil Tabacos Exportadora SA.

The buyer said the Brazilian company is an important supplier of leaf tobacco to the parent company, which has a virtual monopoly of the manufacture of tobacco products in mainland China.

China Tobacco International (HK) says the Brazilian company sold 40,649 tonnes of leaf tobacco worth US$136.2 million last year, making a net profit of US$17.8 million.

The Brazilian company is a joint venture started by China National Tobacco and Alliance One Group, a subsidiary of US leaf tobacco merchant Pyxus International, China Tobacco International (HK) told the Hong Kong Stock Exchange.