Israeli holding company IDB Development is in advanced talks to sell a 30 percent stake in Clal Insurance to a group of investors based in China at a company valuation of 4.6 billion shekels ($1.3 billion).

The acquisition would give the Chinese group control of Clal and it will receive an option to buy IDB's remaining stake in Clal. IDB holds 55 percent of Clal, one of Israel's biggest insurers.

"There is no guarantee that a binding agreement will be signed between the parties or that one will be signed according the above conditions," IDB said in a statement to the stock exchange on Wednesday.

IDB did not name the potential buyer, but the Calcalist financial news website said it was Chinese investment firm Hang Lung Group.

A Tel Aviv court set a late August deadline for indebted Israeli conglomerate IDB Holding, parent of IDB Development, to sell its stake in Clal Insurance.

IDB said it had received a number of other offers during the process to sell Clal Insurance.

Many of the companies IDB owns have been hit by slowing economic growth and increased competition. IDB Holding owes bondholders two billion shekels and IDB Development owes a further 5.8 billion shekels.

Both sets of bondholders - mainly institutional investors led by U.S. hedge fund York Capital - have proposed a debt restructuring that would oust IDB Holding Chairman Nochi Dankner, and give them full control of a combined company.

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