A "problematic and not prudent" stakeholding is the reason behind Victorian cancer diagnostics technology business Rhythm Biociences chairman Otto Buttula's $6.5m selldown of shares to an institutional fund manager.
The 5 million share sale at $1.30 each is the first by the former co-founder of IWL and Lonsdale Securities and takes his holding in Rhythm to 10.82 per cent, from 13.61 per cent, and no further selldowns are "envisaged for the foreseeable future".
The sale by the Newfound Super Fund, of which Mr Buttula is one of three members, will help enhance portfolio diversification and better meet trustee, accounting and auditor advice, the group says.
Prior to the sale, the superannuation fund's holding in Rhythm represented 95.9 per cent of the total assets of the fund and 98.6 per cent of the ASX-listed company exposures.
Post sale, it will continue to maintain an "oversize, majority weighting to Rhythm", retaining a holding of 6.1 million shares and 2.1 million (July 31, 2024) options at $1.80 each.
"Whilst there is never a perfect time to reduce exposure to a company that you are immensely proud of being a part of, in this case, the numbers speak for themselves and a holding above 95 per cent in one company exposure, particularly in a retirement fund, with two other members, was problematic and not prudent," Mr Buttula says.
"Despite the sale, my associated interests continue to maintain the largest shareholding in the company, maintaining a holding of 10.8% (ex-options). Importantly, I am also delighted to welcome another leading fund manager to the RHY register."
The institutional fund manager's name was not disclosed.
Shares in the $291m business last traded at $1.35.
