Washington, Dec 22 : Yahoo is reportedly planning to cut its 40 percent stake in Chinese Internet firm Alibaba Group Holding Ltd. to about 15 percent.

Yahoo, which has been shopping itself to a slew of private-equity suitors, is considering cutting its stake as part of a tax-free transaction worth between 17 billion and 18 billion dollars, The Wall Street Journal reports.

Yahoo’s current stake in Alibaba represents a 40 percent investment and is valued at about 13 billion dollars, according to the paper.

Under the new plan being discussed, Alibaba would put several billion dollars into a newly-created subsidiary that would also house an asset of Yahoo’s choice.

Yahoo would then receive stock of this subsidiary in exchange for two-thirds of its stake in Alibaba, Fox News reports.

According to the Journal, the transaction would be cash-rich for Yahoo as it wouldn’t be officially considered a stale, meaning US authorities wouldn’t be able to receive a tax on it.

Another report from The New York Times suggested that a 17 billion dollars deal is being considered that would involve selling Yahoo’s investment in Yahoo Japan in addition to all but 15 percent of its stake in Alibaba.

Yahoo’s board is scheduled to discuss a broad outline of the plan on Thursday, the Times reported.

If the board signs off on the Alibaba and Yahoo Japan stake sale, it may decide to reject separate investment proposals worth 14 dollar-a-share from private-equity firms Silver Lake and TPG Capital, the paper said. (ANI)