Business
Burford sees successful end to Teinver annulment
Burford sees successful end to Teinver annulment.
About this update from Burford Capital Limited
[{"type":"text","content":"\n \nRNS Number : 5798A Burford Capital Limited 30 May 2019 \n\n \nThis announcement contains inside information.\n \n30 May 2019\n \nBURFORD CAPITAL ANNOUNCES SUCCESSFUL CONCLUSION TO TEINVER ANNULMENT APPLICATION\n \nBurford 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.\n \nAs 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.\n \nBurford 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.\n \nNow 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 unrea...