Newcrest Mining Ltd, which has been hit hard by falling gold prices, has been further destabilised as one of Australia's largest fund managers has sold-off its stake, according to The Australian.
Perennial Investment Partners sold its stake as the miner struggles with weak gold prices and following Newcrest's announcement last month of a weak production guidance and up to $6 billion worth of writedowns in its upcoming profit report (see our video What should investors do about Newcrest?).
Newcrest shares have fallen from over $40 to under $10 in the past two years.
Perennial's stake in Newcrest had been worth about $100 million in November, according to The Australian, but was reportedly only worth about $40 million when it sold the stake.
“We are no longer confident that the company can grow cashflows from current levels,” Perennial growth funds manager Lee Mickelburough told investors, according to The Australian.
“Our valuation for Newcrest has fallen considerably below $10 and hence we sold out of our position during the month (of June).”