# Burford Capital sells Teinver investment for $107 million

- Link: https://www.directorstalkinterviews.com/burford-capital-sells-teinver-investment-107-million/412747235
- Published: 2018-03-13T07:26:49+00:00
- Author: Giles Arbor

**Burford Capital Limited** (LON:BUR), a leading global finance and investment management
firm focused on law, today announced that it has entered into a definitive agreement
to sell its entire entitlement in the Teinver matter for $107 million in cash. Burford’s
investment in the Teinver matter is $12.8 million. Thus, the sale represents an 
investment gain of $94.2 million and a return on invested capital of 736%.

The Teinver matter represents an investment in an arbitration matter arising out
of the expropriation of two Argentine airlines by Argentina’s government. In July
2017, the arbitration tribunal rendered an award in favour of the claimants; that
award entitled Burford to receive more than $100 million under its funding agreement.
For further background to the Teinver matter, please refer to our RNS dated 24 July
2017 and our interim report for the six months ended 30 June 2017.

Burford continues to pioneer development of the secondary market in litigation investments
and regards the sale of this investment as prudent, locking in its gain on the investment
and accelerating its cash recovery to enable reinvestment of that capital.

While Burford does not release individual investment carrying values, we can say
that the Teinver investment is carried well below the sale price, and thus we expect
to show a realized gain from this transaction in our interim results for the six
months ended 30 June 2018, to be published in July 2018.

The transaction is scheduled to close no later than 22 March 2018. Burford intends
to reinvest the proceeds of the transaction in new investment opportunities exhibiting
attractive risk/reward characteristics.

The Teinver award is the subject of ongoing annulment proceedings. Annulment (the
cancellation of an award) is only available in very limited circumstances of serious
error by the arbitration tribunal that we do not believe exist here, with only 6%
of awards ever rendered by the World Bank’s arbitration institution having been 
annulled (and only 3% in the current decade). Were the award to be annulled, the
sale transaction could be rescinded at the option of the buyers, although in that
unlikely event Burford would retain a $7 million fee and would also have its original
entitlement back and be free to pursue the claim again. Based on the historical 
speed of annulment proceedings a decision on annulment would be expected in the 
second half of 2019 although individual case timing is unpredictable.

> **Christopher Bogart, Burford Capital Limited Chief Executive Officer, commented:**“
> The Teinver transaction represents a further step forward in our development of
> a secondary market for litigation and arbitration risk. It is efficient for us
> to move investments into the secondary market as they mature, and obtain liquidity
> to continue to make new investments at the rapid pace we are currently experiencing.
> We believe that the award would have been discounted to achieve resolution of 
> this matter in any event, as is commonplace. Achieving certainty and immediate
> cash for this investment, at an attractive price, is a highly desirable outcome
> for us.”

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