China’s HNA Group is in talks to sell a 60% stake in subsidiary Lucky Air to China Eastern Airlines, the first formal divestment of one of its core domestic aviation businesses.

The remaining 40% stake will be sold to Yunnan Sasac, Yunnan’s state-owned asset regulator.

The move comes as HNA offloads assets in light of its heavy debt burden following a multi-billion buying spree.

However, the proposed sale could be blocked or delayed by an ongoing dispute with former shareholders of the Shilin Air, which became Lucky Air following ainvestment by HNA.

The shareholder, Kunming Literature and Arts Federation Service, is claiming it never received any assets in the new venture, Lucky Air, and is now appealing to the provincial supreme court after being rejected twice by local courts.

The value or timing of the proposed transaction was not disclosed.

Both HNA and China Eastern declined to comment, and Yunnan Sasac said it was not aware of the deal.