|This article is part of the CoalSwarm coverage of Coal barons|
A profile published at the end of 2009 by the magazine AR: Absolute + Alpha described Leone and Luxor Capital Group as follows:
- Christian Leone's low-profile, opportunistic, event-oriented credit firm, Luxor Capital Group is also in this [research oriented] category. The onshore version of the firm's flagship fund, which was up 27% by the end of October, after falling 20% in 2008, boasts a 23% eight-year annualized return. Before launching $1.9 billion Luxor, Leone worked as part of a credit team managed by Silver Point's Mule and O'Shea, as well as Redwood's Kolatch and Larry Buchalter, president of Luxor.
- Luxor focuses on doing its own bottom-up, security-level research, and this year has profited by taking advantage of the significant moves in corporate credit, bank loans, distressed debt, high yield and convertibles.
- Leone says he was heavily influenced by his experience at Goldman. "The entrepreneurial culture where everyone was consistently encouraged to explore new and different ways to profit along with the willingness to move across asset classes and geographies when appropriate shaped the way Luxor has approached to market for the last eight years," he says.
The following reports show Christian Leone and funds controlled by Leone owning a major interest in GCM Resources:
- In November 2008, the group Phulbari Resistance reported that since early October of that year, hedge funds controlled by Christian Leone had purchased major shares of GCM Resources, the sponsor of the proposed Phulbari Coal Project in Bangladesh. According to the report, Luxor Capital Group held 28.63% of GCM's equity, and Leone himself held 12.56%.
- In October 2010, the Financial Express website Investegate reported that the following number of shares of common stock by Leone and his investment groups:
- Christian Leone - 5,214,716 indirect voting shares - 10.22% of voting rights
- Luxor Management LLC - 5,214,716 indirect voting shares - 10.22% of voting rights
- Luxor Capital Group, LP - 5,214,716 indirect voting shares - 10.22% of voting rights
- LCG Holdings, LLC - 4,529,264 indirect voting shares - 8.87% of voting rights
- In January, 2011, the organization BankTrack, citing a January 25, 2011 Morningstar Stock Report, listed Luxor Capital Group as the leading shareholder in GCM Resources with 18,443,828 million shares. (BankTrack also listed holdings of 4,753,217 shares by Christian Leone personally and 4,152,176 shares by Leone's LCG Holdings LLC; however, it is not clear whether those figures are included in the 18,443,828 figure listed for Luxor Capital Group LLC.)
The proposed Phulbari Coal Project
A London-headquartered company, GCM Resources (which is also referred to in some reports as Global Coal Management), has also proposed the development of the Phulbari Coal Project. On its website, GCM states that the Asia Energy Corporation (Bangladesh) Pty Ltd, a wholly owned subsidiary of GCM Resources plc, has a contract with the Government of Bangladesh 'for exploration and mining of coal in Northern Bangladesh'."
On its website, the company states that "the Company has completed a Feasibility Study for commercial development of the Phulbari Coal Project. The Scheme of Development was submitted to the Government of Bangladesh in November 2005 and is awaiting approval. The Company has also provided a proposal to the Government for the development of up to 1000 MW of coal-fired power generating capacity at the mine mouth."
The project was stalled, in the planning phase, when emergency rule was imposed in Bangladesh in January 2007, after widespread protests against the mine. However, following national elections in December 2008, a new administration is actively reconsidering the mine.
WikiLeaks reveals State Department pressure to open Phulbari mine
On Dec. 21, 2010, a WikiLeaks cable revealed US diplomats had secretly pushed the Bangladeshi government to re-open plans for the mine. The cable includes comments by US Ambassador to Dhaka James Moriarty stating that “Asia Energy, the company behind the Phulbari project, has sixty percent US investment.” In the cable, sent in July of 2009, Moriarty also states that he urged the prime minister’s energy advisor Tawfiq Elahi Chowdhury to authorize coal mining, saying the “open-pit mining seemed the best way forward.”
Later on in the cable, Moriarty privately noted: "Asia Energy officials told the Ambassador they were cautiously optimistic that the project would win government approval in the coming months." Moriarty also notes that Chowdhury admitted the coal mine was "politically sensitive in the light of the impoverished, historically oppressed tribal community residing on the land". Chowdhury, according to the cable, then agrees to build support for the project through the parliamentary process.
Between 40% to 60% of all GCM shares are owned by companies that make up the Luxor Capital Group, all of which are owned by Christian Leone, a U.S. citizen and former Goldman Sachs employee who also operates a New-York-based hedge fund in his own name.
On October 22, 2010, Luxor Capital Group announced that it had acquired "control and direction" over 3,983,900 common shares of Forbes & Manhattan Coal Corp, "as a result of the business combination between Forbes and Forbes & Manhattan (Coal) Inc. that took place on September 20, 2010." The acquired shares represent 15.57% of the issued and outstanding shares of Forbes.
Citzens groups campaigning on coal mining in Bangladesh
Articles and Resources
Related GEM.wiki articles
- Sarah Wood "The Goldman Brand Demystified," AR: Absolute Return + Alpha, December 2009/January 2010
- "Changes in Equity, and Derivatives Trading of GCM Resources Plc Shares," Phulbari Resistance, November 13, 2008
- "GCM Resources Holding(s) in Company," Investegate, November 18, 2010
- "Phulbari Coal Mine: Project Financiers," BankTrack, accessed March 2011
- GCM Resources, "Asia Energy Corporation (Bangladesh) Pty Ltd", GCM Resources website, accessed August 2009.
- "Phulbari Coal Mine, Bangladesh" International Accountability Project, accessed Feb. 2011.
- Fariha Karim, "WikiLeaks cables: US pushed for reopening of Bangladesh coal mine" Guardian, Dec. 21, 2010.
- "Luxor Capital Group" CNW, October 22, 2010