Burford Capital Limited Burford sees successful end to Teinver annulment (5798A)
30 May 2019 - 4:00PM
UK Regulatory
TIDMBUR
RNS Number : 5798A
Burford Capital Limited
30 May 2019
This announcement contains inside information.
30 May 2019
BURFORD CAPITAL ANNOUNCES SUCCESSFUL CONCLUSION TO TEINVER
ANNULMENT APPLICATION
Burford Capital Limited ("Burford Capital" or "Burford" or "the
Company"), the leading global finance and investment management
firm focused on law, announced today that the World Bank
arbitration panel considering the Republic of Argentina's annulment
application in the Teinver matter unanimously dismissed the
application and upheld the original tribunal's decision in
full.
As previously reported, Burford sold its entire interest in the
Teinver matter for $107 million in 2018. The transaction included
the ability of the purchasers to put the investment back to Burford
should annulment be granted whereupon Burford would have had to
return $100 million of the purchase price (and Burford would have
regained the investment to relitigate the matter). With the
decision on annulment, the put has now expired.
Burford previously recognised $87 million of income associated
with the Teinver sale ($100 million of the sale price less
Burford's $13 million investment) and treated the incremental $7
million as the premium for the put, which was then carried at fair
value on Burford's balance sheet. With the put now expiring, the $7
million will be recognised as income in Burford's financial results
for the six-month period ending 30 June 2019.
Now that this investment has concluded, Burford is able to
provide a valuation history for the matter, which illustrates
Burford's longstanding and conservative valuation process. At the
end of 2016, at a point when the arbitral tribunal had decided the
key question of jurisdiction in Teinver's favour but had not
decided the merits of the case, the investment was carried at a
fair value of $30 million, $17 million of which was recognised as
an unrealised gain (19% of the ultimate total profit) and $13
million of which was cost. During 2017, the arbitral tribunal
decided the entire matter in Teinver's favour and awarded it
substantial damages, and Burford increased the investment's fair
value by $39 million to $69 million, generating $39 million of
unrealised gain and bringing the total amount of unrealised gain to
$56 million (60% of the ultimate profit). In 2018, when Burford
sold the investment, it recognised a further $31 million of income
to bring the matter to $100 million of proceeds and an $87 million
realised gain. Now, in 2019, Burford will recognise the final $7
million of income associated with the put's expiration.
In aggregate, the Teinver investment produced $107 million of
proceeds on a $13 million investment for a total profit of $94
million, a 722% return on invested capital and a 39% IRR.
The person responsible for arranging for the release of this
announcement on behalf of the Company is Elizabeth O'Connell, Chief
Financial Officer.
For further information, please contact:
Burford Capital Limited
Elizabeth O'Connell, CFA, Chief Financial Officer +1 212 235 6825
Macquarie Capital (Europe) Limited - NOMAD +44 (0)20 3037
and Joint Broker 2000
Jonny Allison
Nicholas Harland
+44 (0)20 3100
Liberum Capital Limited - Joint Broker 2222
Richard Crawley
Jamie Richards
+44 (0)20 7260
Numis Securities Limited - Joint Broker 1000
Charlie Farquhar
Jonathan Abbott
Montfort Communications Limited - Financial +44 (0)20 3770
Communications 7908
Robert Bailhache - email
About Burford Capital
Burford Capital is the leading global finance and investment
management firm focused on law. Its businesses include litigation
finance and risk management, asset recovery and a wide range of
legal finance and advisory activities. Burford is publicly traded
on the London Stock Exchange, and it works with law firms and
clients around the world from its principal offices in New York,
London, Chicago, Washington, Singapore and Sydney.
For more information about Burford: www.burfordcapital.com
This release does not constitute an offer of any Burford fund.
Burford Capital Investment Management LLC ("BCIM"), which acts as
the fund manager of all Burford funds, is registered as an
investment adviser with the U.S. Securities and Exchange
Commission. The information provided herein is for informational
purposes only. Past performance is not indicative of future
results. The information contained herein is not, and should not be
construed as, an offer to sell or the solicitation of an offer to
buy any securities (including, without limitation, interests or
shares in the funds). Any such offer or solicitation may be made
only by means of a final confidential Private Placement Memorandum
and other offering documents.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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