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Luxor Capital

Luxor Capital
Based in New York
Active in Australia, Bangladesh, Philippines, United States
Targeted energy fuels, precious metals

Luxor Capital LP/ Luxor Capital Management is a major US hedge fund (valued at around US$3 billion as of 2011), established and managed by Christian Leone.

A relative newcomer to investment in mining, over 2008 the fund has secured nearly 7 million shares in Canadian-based Australian diamond and precious metals’ explorer, Caldero Resources [SEC information, 14 November 2008].

Most important, Luxor and Leone acquired the largest combined holding in LSE-listed GCM Resources, manager of the highly-controversial Phulbari coal project in Bangladesh, with Luxor at 28.63% and Leone at 12.56% [Hemscott, 6 February 2009]. This stood at 23.66% by August 2009, in the hands of Christian Leone [Hemscott 4 August 2009]. But, by November 2009, Leone’s holding in GCM had increased to 36.56 %, while that of Luxor shrunk to just over 17% [Hemscott 9 November 2009]. Leone's combined investments in GCM Resources were second to those of Polo Resources Ltd by the end of 2011.

Luxor also has a small holding (just over 80,000 shares) in Patrick Coal Corp of the United States which, in February 2009, settled the third largest penalty ($US 6.5 million) ever paid in a US federal water pollution case for discharge permit violations, contingent on the operations of another company, Magnum Coal, which it took over in 2008 [St Louis Post Dispatch, 5 February 2009].”

As of early January 2011, Luxor Capital Partners Offshore and Luxor Capital Partners LP between them held 10.74% of Copper Development Corporation plc which has a major project in the Philippines (a company in which Haywood Securities also holds 4.62%; Libra Advisors LLC holds 3.12% ; and Goldman Sachs Group holds 4.25%).

Later that year,however, Leone appeared to be revising his investment strategy, to concentrate on gold.

In December 2011, Luxor announced it would buy up to 215.5 million shares in Crocodile Gold, which operates a series of gold mines and milling facilities in northwestern Australia - thus adding to the 10% of the company it already owns. If the bid succeeds, Luxor would end up with 85% of Crocodile Gold's outstanding shares [Mineweb 14 December 2011].

Mineweb commented that "the move on Crocodile Gold marks what looks to be a shift toward an increasingly gold-heavy portfolio.

"According to SEC filings, Luxor catapulted its holdings in SPDR Gold Trust from less than 100,000 shares earlier this year to some 4.9 million shares as of September 30, 2011.

"At last count that made SPDR Gold Trust by far the most valuable asset in Luxor's portfolio: worth around $760 million and making up almost a third of Luxor's SEC-reported holdings in terms of cash value" [Mineweb ibid].

Luxor also owns numerous and otherwise diversified assets, including stakes in: News Corp (owned by the notorious media mogul, Rupert Murdoch;) Nordion, a medical products company; and Abercombie & Fitch, a clothing company [Mineweb ibid.

In March 2012, Luxor announced it had secured control of Crocodile Gold Corp.

At the end of September 2010, one of the world's most famous journalistic enterprises, Readers Digest filed its first post-bankruptcy filing to identify its principal holders of the company's equity. Among the listed was Luxor Capital Partners LP. Although it held on 5.1% of the equity, Luxor then went on to "later stage [an] insurrection", as The Deal magazine described it [The Deal, 12 February 2012].

Over the next half-year, "as banks and others sold off RDA equity often obtained by virtue of having been pre-bankruptcy creditors, Luxor would be joined by five other hedge funds...Collectively, not to mention quietly, the five newcomers and Luxor built their stake to account for 31.6% of RDA's voting shares".

Then, according to The Deal, "having obtained sufficient "written consents" from other shareholders to form the majority necessary to replace RDA's board, the six hedgies gave notice of their intention to do just that" [1].