SWITZERLAND. Hedge funds Elliott International* and The Liverpool Limited Partnership* have taken a 5.57% stake in Dufry, according to a filing at SIX, the Swiss exchange, this week.

According to the Financial Times (FT) and Reuters, the shares were those that Chinese leisure-to-retail conglomerate HNA Group used in financing transactions.

The FT said: “Elliott was able to get hold of the stock because HNA recently took out a so-called ‘equity collar’ facility, under which it lent a stake in the Swiss company to a bank in exchange for funding. This collar facility allows the Chinese company to remain a shareholder on paper even though it no longer directly holds the shares. But the bank that provided the collar sold the underlying Dufry stake to funds, including Elliott, to hedge its position, according to the people familiar with the matter. Crucially, HNA cannot call the stock back from these funds and the bank does not have to return shares if it no longer holds them.”

As reported, HNA Group held a 21% stake in the Swiss travel retail giant before the divestment. HNA has been selling off certain holdings to pay down debt.

Dufry declined to comment on the move.

*The SIX filing cites two direct shareholders for the 5.57% acquisition – The Liverpool Limited Partnership of Hamilton, Bermuda (a related entity to Elliott). Elliott, based in New York, was founded by Paul Singer.