UPDATE 2.50pm: UK-based Renewable Energy Holdings (REH) has moved to sell off its 21 per cent stake in Carnegie Wave Energy by selling half its holding to a Melbourne-based private green investment vehicle and distributing the balance of its holding to its shareholders.

88 Green Ventures, headed by Hastings Fund Management founder and Rio Tinto director Mike Fitzpatrick, will take a 12.6 per cent stake in the company through an off-market transfer, with REH's remaining holding being divested via an in-specie distribution.

Carnegie said REH had been selling Carnegie shares on the ASX between January 12 and June 29 to fund working capital requirements.

Managing director and chief executive Michael Ottaviano said the agreement removed a large active seller of Carnegie shares from the marketplace and the associated downward share price pressure.

"Furthermore, it replaces REH with a small consortium of supportive investors with a long term focus, led by an existing shareholder with an outstanding track record in power and infrastructure investment," he said.

Carnegie Wave Energy is pioneering a new form of harnessing wave energy, using a series of submerged buoys is tethered to seabed pump units.