Sydney, June 10 (IANS): Air New Zealand said it will sell most of its shares in Virgin Australia to Chinese conglomerate Nanshan Group for about $172.4 million.

Air New Zealand, which owns a 25.9 percent packet of Virgin Australia shares, will sell a 19.98 percent stake, at $0.24 per share, to Nanshan, although the deal still needs approval from Chinese authorities, Efe news reported.

"We believe Nanshan Group will be a very strong, positive and complimentary shareholder for Virgin Australia," said Air New Zealand Chairman Tony Carter.

"The sale will allow Air New Zealand to focus on its own growth opportunities, while still continuing its long-standing alliance with Virgin Australia on the trans-Tasman network," Carter added, referring to the Tasman Sea which separates Australia and New Zealand.

According to the statement, Nanshan Group, a Chinese private conglomerate which owns the new Qingdao Airline, intends to support the outcome of Virgin's capital structure review announced in March.