Lansdowne Starts Tower Resources Position ~ market folly

Thursday, August 22, 2013

Lansdowne Starts Tower Resources Position

Paul Ruddock's hedge fund firm Lansdowne Partners has disclosed a new position in London listed Tower Resources (LON: TRP).  According to a disclosure made on August 2nd, Lansdowne hold the equivalent of 10.56% of Tower Resources voting rights.  We say ‘equivalent’ because the position is held completely via Contracts for Difference (CFDs) and these derivatives don’t actually confer the right to vote. 

It is uncharacteristic for Lansdowne to hold a large percentage of a company’s stock via CFDs.  They surely have a reason for doing so, but it is difficult to know why they have chosen this route in this particular case. 

Per Google finance – “Tower Resources Plc is an independent oil and gas exploration company. The   Company has targeted exploration licenses, focused on Africa. The Company holds a 30% working   interest in a license which consists of three blocks offshore Namibia through its operating subsidiary,   Neptune Petroleum (Namibia) Ltd., and a 50% interest in three contiguous licenses, onshore and   offshore, in the Sahawari Democratic Republic through its subsidiary Comet Petroleum Ltd. The  Company's primary focus is its 30% working interest in the 0010 License offshore Namibia. “

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