Anchorage Capital will offload its entire stake in Dick Smith before the electronics chain's touted float on the Australian Security Exchange, The Australian Financial Review reports.
According to the newspaper, it is part of Anchorage's investment mandate that it not retain a stake in "revived companies upon exit," however the group's principal Phil Cave will invest a significant amount of his own capital to the float and remain as chairman.
Dick Smith is eyeing an initial public offering of $600 million before Christmas.
The AFR reports chief executive of Dick Smith Nick Abboud has also flagged his intention to retain his option “reflecting his long-term commitment to the business”.
The commitment follows a similar sentiment from Mr Cave, who told the newspaper: "All the directors are committed for the long term."