IOOF has sold around 14.2 million shares in Australian Ethical for $74.5 million, ceasing to be a substantial holder in the investment group as it rolls out its business simplification strategy.
IOOF reduced its previous minority stake of 19.7 million shares in Australian Ethical on Friday morning, selling the 14.2 million shares for a total cash consideration of $74.5 million.
The sale reduced its stake to around 5.5 million shares (4.9 per cent) in the ethical wealth manager.
Australian Ethical shares fell after the sale was filed on the ASX, from $5.96 on Thursday afternoon to $5.09 on Friday morning.
IOOF chief executive Renato Mota commented the divestment aligns with the group’s transformation strategy, including simplification of the business.
IOOF stated the proceeds will be used to reduce debt and provide strategic flexibility for growth opportunities.
“Our investment in Australian Ethical has realised significant returns for our shareholders,” Mr Mota said.
“We remain committed to providing access to ethical investment for the benefit of our clients as well as society generally.”
He added the Australian Ethical funds will remain available on IOOF platforms.
Australian Ethical divested from IOOF last year, after looking over the final royal commission report and APRA’s 2018 legal action against IOOF.
A blog post from Australian Ethical at the time declared it would be exiting on ethical grounds, noting IOOF had failed to address APRA concerns, by not implementing governance and conflict management arrangements which safeguarded the interests of super members.
The ethical investment manager also divested from AMP in 2018, due to wrongdoing scrutinised during the royal commission.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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