Chinese conglomerate Fosun International has hired Deutsche Bank to advise on a potential divestment of its stake in Hong Kong domiciled reinsurer Peak Re, Reuters reported.

The move is part of the beleaguered Chinese firm’s strategy to slash its high debts, people familiar with the development told the publication.

Last month, ratings agency Moody’s downgraded the firm’s credit rating and revised its outlook to negative.

The formal process to divest stake in Peak Re is yet to commence, the sources added.

One of the sources told Reuters that further financial details of the assets will be shared with interested parties by the end of this year.

Peak Re and Fosun did not immediately respond to Reuters’ requests for comment, while Deutsche Bank refused to offer any comment on the development.

The debt-strapped Chinese conglomerate is said to owns 86.9% stake in Peak Re.

Reuters added that it’s unclear what value Peak Re may garner in the sale process.

Recently, Bloomberg reported that Fosun was weighing options for Peak Re and that a potential deal could value the reinsurer between $500m and $1bn.

Peak Re reported a 9% rise in gross written premiums (GWP) for 2021. Its net profit for the year declined to $73.2m from $87.1m in the fiscal year 2020.