Burford Capital Share Discussion Threads

[kuk1doh] 09/9/2023 19:45

For what it’s worth and to help on the post judgment interest debate, there is a difference between state and federal NY courts:

For New York STATE debt collection cases, pre- and post-judgment interest have an accrual rate of 9%. But on April 30, 2022, this rate drops to 2%. In FEDERAL court, the post-judgment interest rate is calculated by looking at the weekly average interest rate of the constant maturity treasury yield of the one-year treasury bill.

Judge Preska sits in The United States District Court for the Southern District of New York (in case citations, S.D.N.Y.) This is a FEDERAL trial court whose geographic jurisdiction encompasses eight counties of New York State.

Looks like T-bill 5.3% is the rate to be applied.

[reddirish] 09/9/2023 19:39

BUR share is 39%

[scubadiverr] 09/9/2023 19:27

Of course!! I knew it was wrong! I'm going with 38% attributed to BUR and now get 2.5 USD per share. Let's hope Seb is correct with his 9%. Thanks for pointing out my error

[donald pond] 09/9/2023 19:22

I often have correspondence with Rob Bailhache. Always quick to reply and helpful

[kuk1doh] 09/9/2023 19:17

Scuba, “only” c.39% of the accruing interest goes to Bur when calculating value per share.

[quantum leaper1] 09/9/2023 18:41

PS - I wrote once or twice to Burford's investor relations in the early days and always got a fast and personal reply from Elizabeth O’Connell. It was this that assured me. Many companies ignore small investors. Elizabeth told me in 2017 that Petersen would take many years.

[quantum leaper1] 09/9/2023 18:32

Hi

I've been in since sub £3 in 2016 and ridden the short attack out. I've been waiting for this result, which exceeds expectations. I might take profits.


My guess is that the result will add about 50%* of Burford's slice to the mCap. By my empirical maths, that's $16bn * 38% * 50% ≈ $3bn so that comes to about $14/share, which is below the price of roughly $16 at suspension.


The question remains, what's the value of the rest of the business?


(*50% is to allow for residual risk and discounting. It may not be right and I am sure others will think it's too little but that's the figure on which I'm basing my personal decision.)

[scubadiverr] 09/9/2023 18:22

Anyone care to calculate what that is per share per annum?

I got 6.58 USD which can't be right?!? (1440m USD / 218.65m)

[three black crows] 09/9/2023 18:17

Or1.4 Billion USD in interest , sounds more that way

[three black crows] 09/9/2023 18:16

Forgot to add that's Million

[three black crows] 09/9/2023 18:15

1440 USD in Interest Per Year.

[three black crows] 09/9/2023 17:55

Yes that correct 1440 million in interest added each year

[three black crows] 09/9/2023 17:53

Just in from SEB MARRIL ............... YPF: With a final ruling (it is not yet) for USD 16,000 M, Arg. will be adding interest at 9% annually until it negotiates an agreement with Burford and the rest of the beneficiaries. - We are talking about USD 1,440 M annually. - The next government must evaluate a new legal strategy. Definately the compounding interest I like to see

[extrader] 09/9/2023 17:52

Sebastian Maril
@SebastianMaril
·
26m
YPF: Con un fallo firme (aún no lo es) por USD 16.000 M, Arg. estará sumando intereses al 9% anual hasta que negocie un acuerdo con Burford y el resto de los beneficiarios.
- Estamos hablando de USD 1.440 M anuales.
- El próx. gobierno deberá evaluar una nueva estrategia legal.

.."YPF: With a final ruling (it is not yet) for USD 16,000 M, Arg. will be adding interest at 9% annually until it negotiates an agreement with Burford and the rest of the beneficiaries.

- We are talking about USD 1,440 M annually.

- The next government must evaluate a new legal strategy..."

That's quite a negotiating card!

[tomtrudgian] 09/9/2023 17:40

Absolutely not, scubadiverr. The local N.Y. Consumer Judgement Rate, previously 9% fixed, is currently 2% fixed.

Nothing to do with the Statutory corporate US post judgement interest which is calculated according to US Treasury rates as varied. Currently about 5.23%.

[scubadiverr] 09/9/2023 13:31

Isn't the post judgement interest @ 9%?

[tomtrudgian] 09/9/2023 13:03

Just a little caution, guys:

Remember the Summary Judgement was a complete win for YPF with costs to be assessed against Burford. Preska said (Legal Standards section 2) that SJ was appropriate when no dispute is found as to material fact or Argentinian law. Reason? The plaintiffs had no shareholding standing at the time to enforce YPF Bylaws 7 or 28. If Burford appealed against YPF they may or will lose. And waste time and further costs.

In April 23 Burford borrowed a 400m dollar bond @ 9.25% fixed, expiring 2031. They cannot redeem early (eg if US interest rates fall) without penalty. Also the post judgement interest is already accruing @ 5.23% fixed. Even if timely received, a massive loss over the years.

Finally Bogart warned 8 Sept of collection and legal costs including in other jurisdictions. These are irrecoverable after judgement.

[kuk1doh] 09/9/2023 12:41

In the recent AGM a share buyback plan was approved. Now is the time for the board to trigger this buyback, especially if there is a positive cashflow YTD. I’d even encourage a debt funded programme.
Why?:
- share is generally believed to be undervalued, perhaps up to 50%, so is a good use of shareholder funds
- signals confidence in future cash flows and business momentum
- will accelerate the share price and raise the price of a potential unwelcome takeover offer. It’s worth recalling that those with deep pockets, thick skin and a long investment horizon can pick up a €6bn (and counting - thanks stentorian) court award, plus a healthy multibillion investment portfolio for just $3.5bn today. Bargain

[kuk1doh] 09/9/2023 12:31

It’s worth remembering that there is a staff bonus on winnings when calculating value attributable to shareholders. If I recall correctly, at the time of the original YPF investment this was 7-8%, not today’s ~10% rate. Cobwebbed memory so happy to be corrected.

Equally, I recall that there is a tax efficient ownership structure of the YPF and Eton Park claims that may well eliminate a tax deduction on a court awarded amount.

So a help and a drag on the value for shareholders.

[stentorian] 09/9/2023 12:08

HTML is not helpful in formatting...
$28.58 per share
BUR's share of Annual Interest is worth $1.50 per share

Appropriation - BUR US$
Petersen 35% 2,625,000,000 2,380,000,000 5,005,000,000 22.86
Eton Park 73% 657,000,000 594,950,000 1,251,950,000 5.72
----------------------- --------------------- ---------------------
3,282,000,000 2,974,950,000 6,256,950,000 28.58

Post-judgment Interest
Petersen 5.23% 747,890,000
Eton Park 5.23% 89,694,500
---------------------
Total Post-judgment Interest - Year 1 837,584,500
Per month 69,798,708
Per day 2,294,752

Appropriation Post-judgment interest - BUR
Petersen 35% 261,761,500 1.20
Eton Park 73% 65,476,985 0.30
---------------------
BUR share of post-judgment Interest - Year 1 327,238,485 1.49
Per month 27,269,874 0.12
Per day 896,544 0.004

218,957,218 Ord shares issued and outstanding

[stentorian] 09/9/2023 12:03

From the Burford release:

"Investors may find notable the Court's commentary on Burford's role in the case:

The Court also rejects the Republic's effort to inject Burford Capital into these proceedings. This remains a case brought by plaintiffs against a defendant for its wrongful conduct towards them, and the relevant question is what the Republic owes Plaintiffs to compensate them for the loss of the use of their money, not what Plaintiffs have done or will do with what they are owed. The Republic owes no more or less because of Burford Capital's involvement. Furthermore, the Republic pulled the considerable levers available to it as a sovereign to attempt to take what it should have paid for and has since spared no expense in its defense. If Plaintiffs were required to trade a substantial part of their potential recovery to secure the financing necessary to bring their claims, in Petersen's case because it was driven to bankruptcy, and litigate their claims to conclusion against a powerful sovereign defendant that has behaved in this manner, this is all the more reason to award Plaintiffs the full measure of their damages."

[kirkie001] 09/9/2023 12:02

Can someone do a back of the envelope and work out how much (per share) the judgement would be worth to Burford, in gross terms, assuming 100% collection (and pre-tax)?

Also how much per share would accrue to Burford per day in interest? (896,544 to the company per day, per above, but not sure how this translates to a per share amount - maybe .1p per day?)

We can then do some more meaningful sensitivities on how much per share given say a 30% discount, a 50% discount, a recovery in 1 year, a recovery in 3 years, etc etc.

TIA

[stentorian] 09/9/2023 11:54

Compensation Interest Total
US$
Petersen 7,500,000,000 6,800,000,000 14,300,000,000
Eton Park 900,000,000 815,000,000 1,715,000,000
------------------ --------------------- ---------------------
8,400,000,000 7,615,000,000 16,015,000,000

Appropriation - BUR
Petersen 35% 2,625,000,000 2,380,000,000 5,005,000,000
Eton Park 73% 657,000,000 594,950,000 1,251,950,000
----------------------- --------------------- ---------------------
3,282,000,000 2,974,950,000 6,256,950,000

Post-judgment Interest
Petersen 5.23% 747,890,000
Eton Park 5.23% 89,694,500
---------------------
Total Post-judgment Interest - Year 1 837,584,500
Per month 69,798,708
Per day 2,294,752

Appropriation Post-judgment interest - BUR
Petersen 35% 261,761,500
Eton Park 73% 65,476,985
---------------------
BUR share of post-judgment Interest - Year 1 327,238,485
Per month 27,269,874
Per day 896,544