GDS Holdings (GDS) said Monday it has entered into definitive agreements to monetize a 70% equity interest in some of its data centers.

GDS said it is selling a 100% equity interest in certain data center project companies to a private real estate investment trust, or REIT, which is a special purpose equity scheme involving the issue of an asset backed security, or ABS.

The asset-backed security is 70% subscribed by top-tier institutional investors in China, led by China Life Insurance Company Limited, and GDS subscribes for the remaining 30% and retains the rights for the operation of the underlying data centers.

The ABS will be listed on the Shanghai Stock Exchange as a standardized security product, the company said. The private real estate investment trust structure is specifically designed to facilitate an eventual injection of the ABS into a public real estate investment trust vehicle when qualified, according to GDS.

The total equity value for the transaction is up to approximately 2.9 billion renminbi ($400 million). The total equity consideration is up to approximately RMB 1.7 billion, or RMB 1.2 billion net of the 30% reinvestment by GDS in the ABS. GDS will receive net cash proceeds of approximately RMB 500 million at closing. The remaining net cash proceeds of approximately RMB 700 million will be paid when certain milestones are met related to the ramp-up of the underlying data centers. GDS said it will deconsolidate the data center project companies, including existing debt and other net liabilities of around RMB 1.2 billion, at closing.

The transaction is expected to close within the next three months and is subject to certain closing conditions, the company said.