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  • Australian Ethical Investment (AEF) has seen its share price plunge off the back of a substantial divestment by IOOF Holdings (IFL)
  • IFL pocketed $74.5 million from the sale, reducing its total stake by 72 per cent to now hold a 4.9 per cent stake in AEF, down from 17.5 per cent
  • IFL says it made the move to pay down debts and allow strategic flexibility
  • AEF’s services may still be accessed via IFL’s platforms
  • The move has caused a drop in Australian Ethical Investments share price, which closed 14.9 per cent lower at $5.10
  • While IOOF Holdings fell 0.4 per cent to $4.45 at market close

Australian Ethical Investment (AEF) has seen its share price plunge off the back of a substantial divestment by IOOF Holdings (IFL).

IOOF held 19.7 million shares in AEF, but has offloaded all but 5.5 million — a 72 per cent reduction in its total stake.

IFL has pocketed $74.5 million from the sale, and maintains a 4.9 per cent share of Australian Ethical Investment.

IOOF Chief Executive Officer, Renato Mota, said the move aligns with IFL’s future plans, but doesn’t do much to change the relationship between the companies.

“This sale aligns to our transformation strategy which includes simplification of our business,” he said.

“We remain committed to providing access to ethical investment for the benefit of our clients as well as society generally.”

IOOF Chief Executive Officer, Renato Mota

“Australian Ethical’s award winning funds will remain available alongside several other ethical investment options on our platforms,” he added.

IFL states “the proceeds from the divestment will be used to reduce debt and provide strategic flexibility for growth opportunities,” and that the “impact on underlying net profit after tax is immaterial.”

AEF’s share price has dropped following the announcement. The company shed almost 15 per cent through Friday’s session.

This is despite IFL mainitaing a substantial stake in AEF, its funds still being available through it platforms, and the move failing to change AEF’s outlook or essential structure.

Shares in AEF closed Friday’s session 14.9 per cent lower at $5.10 per share.

While IOOF Holdings fell 0.4 per cent to $4.45 each at Friday’s market close.

AEF by the numbers
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