The Morning Brief: Argentina Settles with Elliott, Others
Argentina has agreed to pay about $4.653 billion to settle its more than decade-long battle with four hedge fund firms, led by Paul Singer’s Elliott Management, that chose not to participate in Argentina’s two restructurings following its 2001 default on $100 billion in debt, the New York Times reports.
In a press release, court-appointed mediator Daniel Pollack said three months of “intense, around-the-clock negotiations” were settled Sunday evening. “This is a giant step forward in this long-running litigation, but not the final step,” he adds in the statement.
Under the deal, Argentina will pay funds managed by Elliott Management, Aurelius Capital, Davidson Kempner and Bracebridge Capital 75 percent of their full judgments to settle claims outside the Southern District of New York and certain legal fees and expenses incurred over a 15-year period. Aurelius is headed by former Elliott trader Mark Brodsky. Argentina plans to raise capital in the global markets to fund the payments. The four investors were the remaining bondholders
More troubles for the big, high-profile hedge funds with significant stakes in Valeant Pharmaceuticals International. Shares of the embattled drug maker plunged more than 18 percent on Monday to their lowest price in three years after the company confirmed it is under investigation by the Securities and Exchange Commission. Valeant “confirms that it has several ongoing investigations,” including by the SEC, a Valeant spokeswoman told the Wall Street Journal in a statement. Separately, Moody’s Investors Service placed Valeant’s ratings under review for downgrade, citing “concerns that Valeant’s underlying operating performance is weaker” than expectations, “potentially impeding the company’s deleveraging plans. “
Finally some good news on one of David Einhorn’s most disastrous holdings. Shares of natural gas producer and coal miner CONSOL Energy surged more than 10 percent after it agreed to sell a mine and other assets for $420 million, including $398 million in cash. The company also said it plans to suspend its quarterly dividend. The stock was one of three stocks that especially hurt Einhorn’s Greenlight Capital last year, falling 76 percent in 2015. However, it is up more than 9 percent in the first two months of this year.
“We are excited about the prospects for CONSOL Energy as we expect the price of natural gas to recover significantly over the next year as natural gas producers have dramatically slowed drilling,” Einhorn recently told shareholders of Greenlight Capital Re on an earnings conference call.
Clifton Robbins’ Blue Harbour sold more than one million shares of Progressive Waste Solutions, cutting the Greenwich, Connecticut hedge fund manager’s stake in the garbage disposal company to 4.37 percent.
Tiger Global Management participated in the recent $275 million financing of Souq.com, the e-commerce company described by some as the Amazon.com of the Middle East. The New York investment firm had earlier invested in the company.
Elliott Management boosted its stake in Cabela’s over the past two weeks, to 11.3 percent. Two weeks ago, the New York hedge fund firm urged the outdoors specialty retailer to put itself up for sale, among other options.