Fonterra said in a statement on Wednesday it will sell down its Beingmate stake on the Shenzhen Stock Exchange. It did not specify how much of the stake it will sell.

New Zealand's Fonterra booked a hefty writedown on its Beingmate stake last year, and Fonterra CEO Miles Hurrell said in the statement its relationship with Beingmate had been "disappointing" and the plan to trim its stake came after a strategic review.

"We have talked to a number of parties regarding the potential sale of our entire stake in Beingmate, but so far have been unsuccessful in finding a buyer," Hurrell said.

Representatives of Beingmate did not immediately respond to a request for comment.

Fonterra had acquired a stake in Beingmate for about NZ$750 million ($490.50 million) in 2015 seeking to tap into the lucrative branded dairy industry in China.

However, Beingmate's stock began a sharp downturn thereafter. Since the end of 2015, its shares have tumbled 67%, devaluing Fonterra's investment and forcing it to book a NZ$405 million write down for its holding last year.

Based on Refinitiv Eikon data, Fonterra's 18.8% holding in Beingmate is currently worth about NZ$206 million, as of Beingmate's last closing price on August 6.

"Its clearly a disappointing announcement, Fonterra would have got a better price for sale of the entire 18.8% stake in Beingmate," said Jeremy Sullivan, investment adviser at New Zealand-based Hamilton Hindin Greene.

Fonterra's stock was trading 0.5% higher against a 0.1% gain on the broader index <.NZ50>. Fonterra's stock has fallen about 19.5% this year, touching record lows in July, after dropping nearly 27% in 2018.

Sullivan said the move did not come as a surprise to shareholders, as the company had been revealing its troubles with Beingmate for some time and the news is largely baked into its current share price.

A review of Fonterra's dealings with Beingmate had most recently led to the decision to unwind its Darnum joint venture with Beingmate in December last year.

Fonterra has wrestled with drought conditions in Australia and New Zealand, which have forced it to cut its annual earnings guidance in May.

(Reporting by Rashmi Ashok in Bengaluru; Additional reporting by Syed Saif Hussain Naqvi; Editing by Grant McCool and Muralikumar Anantharaman)

By Rashmi Ashok