Chris Ellison backer L1 Capital sells MinRes stock following share price rebound
Melbourne-based stock picker L1 Capital started selling down a chunk of its stake in MinRes last week at an average of about $34 per share to reap $70.9m. It also sold approximately $21m worth of MinRes stock across June and July.
L1's holding in the lithium and iron ore major has been whittled down from a 9.2 per cent peak in March to currently sit at 7.8 per cent. L1 emerged as a major shareholder in MinRes during October, just days after news of Mr Ellison's tax dodging scandal broke.
The investment manager steadily built up a stake over the next few months, making a final push in March by shelling out $58m within the space of a week to boost its stake from 7.6 per cent to 9.2 per cent.
During that month, MinRes shares were languishing between $21 and $25. A raft of issues at its pivotal Onslow Iron project, corporate governance concerns, weak lithium prices, and a ballooning pile of debt weighed heavily on the stock price.
But the Onslow project is getting back on track and iron ore prices have held up, somewhat easing concerns about balance sheet pressure. Improving lithium sentiment has provided another tailwind.
MinRes shares are up 160 per cent since sinking to a five-year nadir in April, but remain down 25 per cent year-on-year.
L1 has notably said Mr Ellison, who owns 11.5 per cent of MinRes, should remain as boss of MinRes despite his various transgressions coming to light over the past year.
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