Wilbur Ross, the quintessential distressed asset investor, made a dramatic increase in his holding in EXCO Resources Inc (NYSE:XCO).
Wilbur Ross is one of the richest people in the United States, with a net worth of $2.3 billion, based on The Forbes 400: Richest Americans. Most of his investments are focused on distressed and failing companies that need restructuring, particularly in steel, coal, telecommunications, and textile industries.
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EXCO attracts many noted investors
Oil and gas company EXCO Resources Inc (NYSE:XCO) has attracted substantial investments from a number of noted investors, including Oaktree’s Howard Marks and Fairfax Financial Holdings Ltd (TSE:FFH)’s Prem Watsa.
Last week, Howard Marks, founder and chairman of Oaktree Capital Management, increased his stake in EXCO Resources Inc (NYSE:XCO) based on a filing submitted to the Securities and Exchange Commission (SEC). The hedge fund manager increased his stake in the oil and natural gas company by 23% to 45,251,182 shares. Marks’ investment management firm held 36,778,946 shares during the third quarter.
Howard Marks’ investment management firm acquired 8,394,736 shares worth around $41,937,680 through a rights offering conducted by EXCO Resources Inc (NYSE:XCO) on December 17, 2013. The rights offering gave shareholders the right to buy 0.25% of a share of the company’s common stock for a price equal to $5.00 per share.
Wilbur Ross acquired through rights offering
Like Howard Mark, Ross’ recent EXCO purchases were part of a rights offering EXCO held recently. In its statement, EXCO indicated of the approximately 54.5 million total shares of common stock expected to be issued, EXCO Resources Inc (NYSE:XCO) believes that roughly 28.2 million shares will be issued in the rights offering and roughly 19.6 million shares and 6.7 million shares will be issued to affiliates of Wilbur Ross’s company WL Ross & Co. LLC and affiliates of Hamblin Watsa Investment Counsel Ltd. respectively under their respective Investment Agreements.
As his third-largest position, EXCO Resources Inc (NYSE:XCO) encompasses 22.5% of Ross’ concentrated portfolio behind BankUnited (NYSE:BKU) at 27.1% and Assured Guaranty Ltd at 29.5%.
Wilbur Ross started his position in EXCO Resources Inc (NYSE:XCO) in third quarter 2010, adding to it over subsequent quarters at a price averaging $15.85, resulting in an approximate 69% loss on the holding, based on its Monday trading price of $4.88. However, Wilbur Ross hadn’t purchased more shares since second quarter 2012.