The main shareholder in Tsingtao Brewery is set to up its stake.

The Chinese brewer said today (31 August) that the state-owned Asset Supervision and Administration Commission of the People's Government of Qingdao will buy all of the shares held by China Orient Asset Management Corp. for an undisclosed sum.

The 2.2% stake - equivalent to 29.3m shares - could be worth up to HK$263.7m (US$33.8m) based on Tsingtao's last stock price of HK$9.00, and pushes the commission's holding up to 32.8%. At the same time, the purchase paves the way for a share reform proposal, details of which will be announced in the next few days. Subsequently, trading in the brewer's shares was suspended on Tuesday and was due to restart today.

The commission obtained confirmation from the Securities and Futures Commissions that it would be exempted from making a general offer after the purchase.

Anheuser-Busch holds a 27% stake in the brewer.

Earlier this week, local reports claimed that Tsingtao is looking to increase its annual production through building a new brewery and upgrading an existing facility. The brewer is reported to have set aside CNY300m (US$37.7m) to build a plant in the Shangdong province, while CNY62m will be spent on its site in Jiangsu province.