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LONDON (Alliance News) - Burford Capital Ltd on Wednesday said it has agreed to provide USD45.0 million in litigation financing to one of the twenty biggest companies listed in London.
The client in question is a member of the FTSE 100 index, though it was not named by Burford, which provides money for legal expenses. Burford said the client wanted to "preserve the confidentiality of its litigation-related activities" and not have its identity publicly released.
Burford said the financing arrangement allows the customer to avoid paying for part of its legal expenses with operating cash, therefore managing to avoid a hit to operating profit as the case is heard.
The client is able to use the capital provided by Burford to "relieve legal expense budget pressure or for corporate purposes unrelated to the litigation matters". Capital is provided on a non-recourse basis, entitling the client to book it as income without having to wait for the outcome of litigation.
In return, Burford will receive a portion of any proceeds from a portfolio of litigation matters. That is designed to protect Burford against the risk of an unfavourable outcome in one of the litigation matters.
"This transaction is another example of the continuing transformation of litigation finance into corporate finance for law, and our focus on constructing innovative solutions for businesses of all sizes, including the world?s largest companies," Burford Chief Executive Christopher Bogart said.
Burford Capital shares were up 1.0% at 197.00p.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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