Business
Further Petersen Secondary Market Transaction
Further Petersen Secondary Market Transaction.
About this update from Burford Capital Limited
[{"type":"text","content":"\n \nRNS Number : 8748H Burford Capital 13 June 2017 \n\nThis announcement contains inside information. \n \n13 June 2017\n \nBURFORD REPORTS FURTHER SECONDARY MARKET TRANSACTION ACTIVITY\n \nBurford Capital Limited (\"Burford\" or the \"Company\"), a leading global finance firm focused on law, announces that it has sold further participation interests to institutional investors in its possible future proceeds from its investment related to the Petersen claims. \n \nYesterday's sales represent a further 15% of Burford's economic entitlement from the Petersen claims for a sale price of $66 million, implying a total value for Burford's economic entitlement of $440 million.\n \nThe sales are in addition to prior sales in March 2017 and December 2016 in which Burford sold 10% of its economic entitlement in the Petersen claims for a sale price of $40 million, implying a total value at that time for Burford's economic entitlement of $400 million. Thus, Burford has now sold a total of 25% of its economic entitlement in the Petersen claims for a total of $106 million and continues to hold 75% of its original economic entitlement.\n \nDespite Burford's enthusiasm for the Petersen claims, there is significant risk in all litigation and Burford regards these sales as prudent risk and balance sheet management transactions. Burford has agreed that it will not engage in further sales of its interest in the Petersen claims at an implied value of less than $600 million and that Burford will not reduce its holding below 65% until after 31 December 2018 and will permanently hold at least 50.1% of the economic entitlement in the Petersen claims.*\n \nAs before, given the size of these sales and the inherent unpredictability of litigation, we do not necessarily regard the implied valuation of these sales as the appropriate carrying value for the remainder of the investment on Burford's balance sheet.\n \nNonetheless, Burford is issuing this RNS because the implied valuation of these new sales may cause a further increase in Burford's carrying value of the Petersen investment and thus may cause a corresponding increase in 2017 income. However, Burford has not yet determined, nor yet consulted with its auditors about, the impact of these sales on its total carrying value of the Petersen investment or...