LONDON (Alliance News) - Burford Capital Ltd on Thursday said the World Bank arbitration panel has dismissed Argentina's annulment application and upheld a tribunal decision on the Teinver matter.
The Teinver matter concerns Teinver SA, an affiliate of Spanish firm Grupo Marsans, in a case against Argentina's expropriation of two airlines in 2008. Teinver claims the government took control of the airline illegally, a view which the arbitration panel upheld.
Burford, which provides funding for commercial legal action and then takes a cut of successful claim pay-outs, sold all of its interest in the Teinver matter for USD107 million in 2018.
The deal gave the purchaser the ability to put the investment back to Burford if the panel granted Argentina's request for annulment. Burford would then have been required to return USD100 million of the purchase price. Following the annulment decision, the put option has now expired.
Burford has already recognised USD87 million of income associated with the Teinver sale - USD100 million of the sale price deducting Burford's USD13 million investment - and treated the USD7 million as a premium for the put, carrying is at fair value on its balance sheet.
The put having now expired, the USD7 million will be recognised as income in Burford's financial results for the six months to June 30.
In total, the Teinver investment produced USD107 million of proceeds on a USD13 million investment, giving a total profit to Burford of USD94 million, a 39% internal rate of return.
Shares in Burford were up 1.6% at 1,671.00 pence on Thursday morning.