Pen maker Shanghai Hero Group Co Ltd said it plans to sell a 49 percent stake to a new partner, according to a statement filed with the Shanghai United Assets and Equity Exchange.

The State-owned enterprise expects the move to overhaul its current business model, after the firm was hit with severe losses in the last two years.

According to the announcement, the deal would allow the new shareholder to be the original equipment manufacturer of the popular Hero and Doctor branded pens.

In addition, the new partner would be granted the rights to rent land owned by the Hero Group.

However, Hero would still claim the ownership of its plant in Shanghai and all the patents of its products, the statement said.

Last year, the company's debt climbed up to 68 million yuan ($10.9 million), compared with total assets of just 37 million yuan. It posted a net loss of 4.72 million yuan in 2011, three times more than in the previous year.

An iconic black Hero pen with gold engraving was used in 1997 at the signing ceremony for the Hong Kong handover between China and the United Kingdom.

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