New York hedge fund Tenor Capital Management is in line for a big payout from a bet on a gold mining company expropriated by the Venezuelan government before ever breaking ground and is now set for a $1.4bn settlement, according to a report by Bloomberg.
Over the past decade, Tenor has helped finance Crystallex International Corp’s litigation in return for an undisclosed portion of any award won by the Canadian firm relating to former Venezuelan President Hugo Chavez’s 2011 decision to revoke its license to mine one of the world’s largest gold deposits.
Crystallex is now at the head of a long line of creditors, with combined claims in excess of $5bn, who are set to benefit when shares in Venezuelan refiner Citgo Petroleum Corp’s parent company are sold at an auction scheduled to begin next month.
US District Judge Leonard Stark placed Crystallex at the top of the list of creditors because it filed its claim first, ahead of other creditors including Conoco and OI European.
In 2014, Tenor had rights to over 70% of any payout having loaned Crsytallex a total of $62.5m. As of 2017’s the loans had increased to over $75m.