Evergrande, China's second-largest property developer, is in talks with UK housebuilder Cala Homes.

The possible acquisition will be the first Chinese venture in the UK building sector. Evergrande is expected to buy the stake currently held by Legal & General and Patron Capital. However, it is reported that the talks are still at a preliminary stage.

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According to Sky News, Evergrande is currently heavily saddled with debts. The company recently announced its plans to sell some of its non-core assets including its water, oil, and dairy business. Evergande is also looking to lower its debt burden by investing in other companies. The company has a stake in a professional Chinese football club called Guangzhou Evergrande Taobao FC. The company is listed on the Hong Kong Stock Exchange.  

Cala Homes, on the other hand, bills itself as the UK's upmarket homebuilding company. It recently reported upbeat results for the quarter that ended in June. The company reported contracted land bank with a gross development value of close to 4.7 billion pounds, showing year-over-year growth of 15 percent. Its net bank debt as at the end of June stood at 123.9 million pounds.

It is believed that the potential deal may be worth close to $738 million. The completed sale would also be a positive signal for the UK housebuilding sector after its exit from the European Union. The British Pound Sterling also plunged after the exit, making it cheaper for the overseas companies to invest in the UK.

A spokesman for Cala declined to comment on the potential deal.

TagsEvergrande, Patron Capital, Cala Homes