RE: This is money article about the recent Short Declaration by ARCM08 Dec 2019 08:39
Premier Oil becomes the target of record £132m short bet by Hong Kong hedge fund Asia Research & Capital Management built up an enormous 17% short position The hedge fund did not disclose the bet to the watchdog until Friday last week The short position is huge by typical standards By JAMIE NIMMO FOR THE FINANCIAL MAIL ON SUNDAY
PUBLISHED: 22:03 GMT, 7 December 2019 | UPDATED: 22:03 GMT, 7 December 2019
View comments A Hong Kong hedge fund secretly built up the biggest ever short position in the UK by taking huge bets against Premier Oil shares.
Asia Research & Capital Management should have revealed its bet to the Financial Conduct Authority in February 2017 when its short position in the North Sea oil firm’s shares went above 0.5 per cent.
But ARCM, which invests in distressed assets, did not disclose the bet to the watchdog until Friday last week – when it belatedly revealed that it had built up an enormous 17 per cent short position worth £132million.
ARCM built up an enormous 17 per cent short position worth £132million in Premier Oil +1 ARCM built up an enormous 17 per cent short position worth £132million in Premier Oil
Short-selling involves borrowing shares from another investor for a fee, selling them, buying them back, hopefully at a lower price.
The shares are then returned to the original owner, with the short-seller pocketing the difference.
ARCM’s huge short position – thought to be the largest ever disclosed in the UK – is understood to be a hedge against its $380million holding of Premier Oil’s $2.55billion net debt, which becomes repayable in May 2021.
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Saatchi bosses buy £1m of new shares despite price fall... SHARE THIS ARTICLE Share HOW THIS IS MONEY CAN HELP Premier Oil shares: Check the latest price here Premier Oil agreed a crucial debt refinancing package in February 2017 when ARCM bought its debt and began shorting the shares as insurance.
The £132million short position does not mean ARCM has spent £132million betting against Premier Oil, but it does pay a fee for borrowing the shares. It means ARCM has some insurance if the shares fall and it suffers because it holds vast sums of its debt.
This is a rising concern when oil prices are falling, as they have done since April.
A source familiar with ARCM, which has not increased its short since June, said the company always hedges all its investments.
Even so, the short position is huge by typical standards. It is the largest short position in Europe by percentage of a company’s shares, according to analysis by Breakout Point. The second largest is CPMG’s 5.86 per cent short position in German technology company Aixtron.
Premier Oil and ARCM declined to comment. The FCA decli
Remember a little money could turn serious my family years laid down 20000 pounds at 80 odd p got 25000 shares approx if u laid down 500 you get 30000 shares . We have not had delution here in years .if we get going 2000 could be 40000
Has put us in good stead employing the locals who thought there life was over not quite but you know what I mean . I feel a lot of things will be sweeter for us now once we get funding update we are of to the faces
Interesting currently have over 74 million in cash and last five years year on year cash has grown loads . Be lovely if this all works out with stenna line Remember this was over 0.6o not so long a go ! Good nite all