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Continued ……..
The Petersen Group was absolutely out of the claim and the rights to collect, a situation that is judicially clarified in the Spanish justice system and recognized by the Burford themselves who desisted from claiming Petersen
Taken from in todays news;
https://www.delsurdiario.com/35682-nueva-caso-ypf-piden-embargar-aerolineas-argentinas-el-banco-nacion-el-bcra-y-hasta-los-satelites
Burford Capital goes for everything. The winning vulture fund in the trial against Argentina for the way in which the country re-estitized YPF in 2012, not only wants embargoes to be enabled on the shares of the oil company in the possession of the national state, but also seeks to take into account the roles that the country owns Aerolíneas Argentinas, ARSAT, the Central Bank of the Argentine Republic (BCRA), the Banco Nación and Enarsa.
The fund filed a letter in the last hours in the Court of First Instance of the Second Section of New York managed by Loretta Preska, so that the actions that the Argentine Republic has in these societies are considered as an "Alter Ego" of the country. And that, consequently, those positions are considered as part of the assets of the Argentine state. And, then, seizable as a guarantee that the country will fulfill the commitment to pay the plaintiff, the US$ 16 billion plus interest than Burford and Eton Park (as a minority) that Preska considered as claims of the two funds that expired in the trial.
The New York judge, who determined that the lawsuit of Burford and Eton is correct and ruled against the country, a decision that the country took to the second instance of the New York Chamber of Appeals; now she must resolve the claim of the two funds that want to guarantee the future collection, seizure assets of Argentina. In March they had presented the alternative of considering the shares of YPF as "Alter Ego" of the country, and now they extend the claim to those other companies in power all or in part of the Argentine state.
Preska also has to resolve another issue raised by Burford Capital and its partner in the lawsuit, Eton Park: the calculation of interest that the country will have to pay for having decided to appeal to the second judicial instance of the United States. According to the judge, in principle the interest accumulated to date would reach 545,084,808 dollars; so the money that should be paid to the plaintiffs who expired in the first instance would exceed US$ 17 billion today.
That is, the United States. Justice usually takes the performance of the 10-year bonds issued by the government of that country during the current year of the application of the lawsuit, so the final calculation would be just over 500 million extra dollars that should be added to the original claim authorized by Judge Loretta Preska.
Burford claims for the alleged damages that the payment to the Spaniards of Repsol caused to the remaining 49% of the shareholders of the oil company, after the nationalization of 2012. The basis of the demand is for the expropriation of most of the shares of the oil company, but on behalf of the Spanish companies Petersen Energía and Petersen Inversora, two companies already bankrupt, opened by the Petersen Group in the days when it was a partner for 25% of YPF and from the fact that former President Néstor Kirchner enabled his income as local partners of the oil com
I see it to Renegade
With Burford finishing at $15.44 (£12.32) over the pond and 1Q24 results due at 12.00pm BST on Monday 13th May, Monday morning trading could prove to be worth a watch and quite entertaining.
Interesting insight on economic progress - positive news for BUR I feel. Just Google, should get you past the paywall.:-
Milei’s Argentina is fast becoming the Texas of Latin America
and
Argentina’s Lithium Triangle bonanza hands Javier Milei a trump card
Stick your finger in the air, we have Q1 coming!
I think they will either be similar to Q1,23 or better showing more cash generation. We know it usually the slowest quarter.
2024 Q1 Results to be released noon (BST) on Monday 13th May.
Elon must have seen this...
Ashmore latest
.."Argentina: The Economic Ministry is discussing a new programme with the International Monetary Fund (IMF), laying out its new monetary and exchange rate plans.
Minister Luis Caputo expects inflation to slow again in May.
The Lower House approved the first chapter of President Milei’s new omnibus bill that expands his executive power over administrative, financial, economic and energy matters for one year.
This includes dissolving special purpose government funds and privatising companies.
These measures have now moved to discussion in the Senate."
GLA
Does anyone remember the writeup in Value Investor Club of Brurford with the price target of £32-38, excerpted at the end of March?
It is now available to read in full here (as 45 days have passed since publication) Registration required but it is free.
https://valueinvestorsclub.com/idea/BURFORD_CAPITAL_LTD/5322640630/messages/218415#description
The author as far as I can see is anonymous, but appears to know their stuff.
It's interesting that the casual reference made to Burford staff visiting Buenos Aires has since been confirmed by the Argentine Government!
https://audiencias.mininterior.gob.ar/buscar?q=molot
A trip to Miami in October would work 🤣
BBH / Rider my view is we can’t assume anything apart from an agreement with Argentina to settle will improve the SP an awful lot and will bury once and for all doubts on the metrics BUR uses for predicting a fair ROI..
Hi Rider75,
You're right, I think somewhere Chris spoke of the benefits of having extra funds to deploy, either on 'larger' cases or on cases with a favourable risk:reward profile. Maybe somewhat higher risk, but materially higher upside, so a 'sexier' element of the portfolio.
ATB
About 30m bill payers will receive something if successful - the maths says about c£25 each after Burford collect c£120m (£30m + £90m)
Sorry I was not accurate
You should not assume that this claim is currently priced in th SP as 0.
Of course it an additional question how the whole other business is appraised, and to what extent could being succesful in this particular mega deal boost the approach and picture of BUR.
RIDER75,
Nice to see someone is checking …
Current SP. 12.50 + 8.93 = 21.43 pounds
Seems correct to me
Your calculation is flawed and oversimplistic. Assuming that the potential payout is priced as 0 today, and after getting somehow ths specific ammount , you simply add that to the recent sp....
Seb's latest, overnight :
.".Bainbridge Fund wants Judge Preska to compel Argentina to transfer the ownership of all YPF shares expropriated by the Republic in 2012. Bainbridge is one of multiple holdouts with favorable judgment that haven’t yet received payment. Bainbridge is also trying to attach Central Bank assets..."
This tweet already appears to have received 101.6K views...!
A few analysts/investors ....and maybe a lot of Argentinians?
Hmmm...
Bluewiley,
adding to your post.
I think the 28 usd is hopeful but not realistic.
We might get 40% of that with a haircut.
That works out at 11.20 usd or 8.93 pounds.
That would bring us up to 21.43 pounds.
I prefer to calculate on the low side rather than dreamland.
Cont..
Right now, Burford is the only funder with that scale. CEOs, CFOs, and General Counsels like collecting bonuses. If that means giving up some future economics to Burford, which is playing the justice-turns-slowly game, so be it. With these dynamics, I think demand will grow. Ultimately, shareholder returns will come down to Burford's case-selection abilities, which historically have been outstanding. Since inception, only 8% of deployments have gone to adjudication and lost, resulting in a ~85% loss of capital to those line items. In contrast, 73% of deployments reached a settlement returning an average of 58% (23% IRR), and the remaining 19% reached a winning adjudication returning an average of 247% (49% IRR). Time will tell if these high returns continue, but there is a lot of upside potential that is not being priced into shares today. The CEO seems to agree with his recent $5M purchase.
Exciting times ahead … 💥
Burford (BUR) - As the ancient Greeks said, "The wheels of justice turn slowly, but grind exceedingly fine." As a litigation financer, Burford has funded a large portfolio of legal cases that are working their way through the legal process. Their largest "holding" is a judgement against Argentina related to the YPF case, for which Burford is in charge of pursuing the payout. If Burford were to collect the full $6.2B (not including post-judgement interest accruing at ~5% per year), this windfall would be worth $28 per share. To be clear, especially given Argentina's history in cases of this type, it is my expectation that Burford will take a haircut in a negotiated settlement. Interestingly, Burford's CIO Jonothan Molot appears
on the visitor logs for senior Argentinian officials (link)... at least they are talking.
While the YPF judgment is a massive asset for Burford, it is far from the only case that should start gaining more traction in the near term. Despite receiving $242M of proceeds from $135M of pre-2020 vintage deployments in 2023, Burford still has ~$782M of deployments remaining in that vintage that we should start seeing flow through the P&L in the form of realizations as courts are now fully re-opened and cases delayed by the pandemic conclude.
Similar to the inevitable growth of KKR, excluding a change of law limiting litigation finance, I believe that Burford should continue to grow because of corporate manager incentives. They are solving two problems, particularly for public companies. First, legal cases are a drain on current year P&L. Thus, if a CEO or CFO wants to preserve this year's earnings, they can have Burford pay the legal expenses, resulting in "found money?" It is easy to see a CEO hugging the General Counsel and CFO when they tell him/her that they found the money to "save" the year simply by partnering with Burford.
The second problem is that the market does not generally attribute value to pending legal cases, and GAAP accounting does not help. However, if you sell a portion of the potential outcome to Burford for cash, the market does value that. Want to
"strengthen" your balance sheet, at least optically, for the market or lenders? Sell a part of your case to Burford. One Fortune 50 company partnered with Burford last year for a $325M commitment to their case.
Wonder if the electricity consumers/customers would get a few quid back?
I forgot to add that the permission to proceed was granted yesterday ..
https://www.marketscreener.com/news/latest/992-million-UK-lawsuit-against-European-power-cable-groups-gets-go-ahead-46623573/
Hat tip to SommersetLad