Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
When I last looked "Stirling" is a town in Scotland, whilst "Sterling" is the UK currency.....Or perhaps you are thinking of the new Scottish currency when they finally get independence?
They say if humans look at data for long enough they will find a pattern in there, and personally I think charting is like that. Just a lot of imaginary nonsense.
Its obvious that BUR share price will either boom or bust depending on events in the next month or so. No chart can predict the outcome. Will BUR produce Accounts for 2022 on the basis agreed with the SEC? Will E&Y give audit approval? Will we be looking at further delayed Accounts and appointment of yet another CFO? Will the Accounts be produced in time to avoid a default on certain borrowings, or breach of listing rules? What will the difference be between Fair Value and new US GAAP in terms of value of assets? Will the Argies continue to dodge and weave? If YPF situation cannot be monetised at least partly will BUR be able to find new sources of capital somewhere to fund its financial commitments on ongoing cases? (Remember that BUR is committed to holding at least 50% of Petersen). Will it have to pause new business? .......
Finally some of the comments here on shorting are a bit confused. I think of shorters as some kind of protection for investors. You know that they will have to buy back at some point. I suspect that short closing has been partly responsible for the recent recovery in BUR SP. But if bad news emerges the cushion of short closing will be that much reduced.
I am not going to finish with the irritating DYOR sign off. No amount of research can give you the answer to the questions. You just have to believe......or not.
Don't really agree with ****ging off others just because they have a different opinion from your own. One thing AofC is definitely right about is that BUR has an insatiable appetite for capital, whether in the form of debt or equity. It seems to have got through the $1bn it raised in the last year, no trouble. BUR has a 100% debt/equity ratio and some would say that is getting too high for comfort. Especially when you remember that half the equity consists of the written up value of YPF. Ouch. It needs the YPF situation to come up with some ready cash sooner rather than later. Fortunately BUR has some good counter measures that should discourage the Argies from appealing (apart from posting a bond). Such as bringing YPF back into play and claims for "promissory estoppel" and "consequential damages" perhaps for forcing Petersen into bankruptcy. And even punitive damages for the appalling treatment of minority shareholders.
No mention of pre judgement interest, not least by Preska, as far as I know. With all the Argies (and Preska's) delays this would be a significant component of BUR's entitlement to damages, perhaps nearly half. An SDNY official rate of 9% pa simple interest has been mentioned in this chat. Is this something that would be decided at a trial on the quantum of damages? Does the plaintiff have to make this claim or does the Court apply interest of its own motion? I am sure that BUR have not overlooked this issue, but it would be nice to know how this will play.
Mr M, Perhaps it is expecting too much of the US legal system to be proof against such cynical political calculations, just the sort of thing we would expect the Argies to get up to. Not a good look for the leading Western liberal democracy, though, as a supposed upholder of the rule of law.
I am going to leave this for now, still hoping that all the long suffering BUR shareholders will get their just reward! Meanwhile, thanks for your comments.
I just don't buy this complexity thing. Its actually quite straightforward. An uncontested breach of contract. Preska doesn't even have to work out the basis for assessing damages. There is the formula in YPF's by-laws. Alright this is an Argy document governed by Argy law, and there is a glitch in the formula. But when the intention to compensate for expropriation is purposely explicit in the by-laws then any modest legal defect in the formulation would not be a barrier to implementation. There must be numerous precedents the Judge could easily find, even under Argy law.
Then, even to say that another lot of cases are also late, so it is quite "normal" that YPF should be late as well, is a strange way of thinking. They say two wrongs don't make a right, but what about 6? Get a grip Southern District of New York.
Mr M, you say that there might be "other reasons" (for the delay). Give us a clue! Maybe its the sheer size of the potential award that Preska finds scary. Perhaps she is thinking: is this justice? Well yes, the Argies (actually their government) have brought this on themselves. As well as from trying to expropriate a major company for nothing, then paying off the majority shareholder whilst leaving the minorities with zilch, and bankrupting one in the process, by any standard that needs to be punished.
Mr M, thanks for the information. What it does not do is explain what she is still hung up on, requiring 9 months of deliberation. That is after previously consulting all these "experts" and "scholars", as well having exhaustive hearings on jurisdiction and the rest. Then you have to remember that the Argies paid US$ 5bn to pay off Repsol. Surely they would have explored all legal means of avoiding that. What legal arguments have they discovered now that are different? On a much smaller scale but still significant, the investors who bought 10% of the Petersen claim in 2019 were sophisticated institutional investors who must have done comprehensive due diligence bearing on the same issues. Apologies for repeating the point, but what is delaying Preska?
Maybe the main issue that concerns the SEC is the amount of subjective judgement that goes into BUR's "Fair Value" assessments, rather than concern that BUR has actually overstated values. Probably the SEC would like a more mechanistic approach with less management intervention during the course of cases. Discounting back from an expected outcome is an example given (but who can reliably predict the outcome?). Under the present method, where BUR have adjusted the carrying value during the course of cases, BUR show a convincing historical track record of understating upgrades, whilst anticipating losses. Nevertheless the SEC may still be concerned that the method (if adopted as a generally accepted standard) would allow other less scrupulous litigation finance companies too much scope to overstate profits, creating solvency problems later. In any case, given the nature of litigation, all methods will need subjective inputs, open to manipulation. My take is that BUR's Fair Value method should be accepted, but that the SEC should make the auditors earn their fees by specifically confirming that they have reviewed the portfolio and satisfied themselves that it is fairly valued (perhaps including the use of historical data such as presented by BUR).
Having said all this I think it is an abuse of authority if the situation is that the SEC have prevented BUR from issuing their 2022 annual accounts, mainly to use BUR as a test case for some supposed "improved" but untested method of valuation.
Has anyone got any idea what is delaying Preska J 's decision? Could it be that ambiguity in the operative date to apply to the damages formula? Or whether damages should be paid in Pesos or USD? A while ago she rather foolishly said that she would look at Argentine laws. I was puzzled by that at the time, considering that it had already been decided to try the case in US jurisdiction. How could she possibly become an instant expert in Argentine law? That certainly would explain the delay. But the Argie judiciary are controlled by the Argie government, and the judges are told what decisions to make. So why should a US Court take Argie law into consideration when its routinely disregarded in Argintina? And how would you resolve any conflicting laws in the two jurisdictions? Just weird.
Could it be that the auditors are delaying signing off the 2022 results pending a decision or settlement on YPF? They wouldn’t want to sign off and then shortly after have a decision/settlement that made them look incompetent.
That could mean we now have a four cornered stand off.
In the blue corner Bogart needs to have a YPF settlement that significantly beats the 2019 sale, so that those investors make a profit. The 2019 sale was also the basis for writing up the YPF book value, so again CB won’t want to show a loss on that. He also needs to announce the 2022 results soon, before investors have a nervous breakdown. And staying compliant with AIM rules as well as keeping the auditors onside. All at the same time as facing down the Argies.
Meanwhile Preska J is perfecting her judgement. She would like the parties to reach a settlement so she can avoid making a decision about things such as the date to choose to apply to the formula for damages, and whether or not to award interest. She would prefer not to have endless appeals over these and other points. So she is not in any hurry to put her head above the parapet.
In the red corner we have the Argies. Still playing hard to get with their usual MO of delay, delay, delay. They may sense that they have CB on the ropes because time is running out for the results announcement, and ultimately, compliance with AIM rules re publication of annual Accounts.
So what should CB do? Above all his priority is to get the best possible result out of YPF. Its not an exaggeration to say that the future of BUR hangs on this. No pressure. Share suspension might give some breathing space, but the Argies could just wait out that as well, even to the point where the shares were de-listed (on AIM). I have no knowledge of US law, but perhaps BUR should serve a motion requiring the Court to hand down its decision? To my mind, a Court decision is the only thing that will force the Argies to negotiate.
You have to wonder how those investors who bought into the Petersen claim are feeling now. If they lose money on their investment that won't do BUR's reputation much good. Those investors might not be so keen to take a slice of other dead certs that BUR would like to offload. And BUR investment funds might not be so popular either. Preska J. get off you butt and give us your decision.
Another BUR enthusiast heading for disappointment. She expects that the YPF decision will be announced "any day now". Comment as of 17 Feb. Yea, right. With a P/E ratio of over 300, minuscule div, and half the NAV consisting of written up unrealised gains on YPF, the share price is always going to be fragile with no decent fundamentals to support it, and a complete information vacuum. Now that BUR is committed to quarterly reporting at least we might get more frequent updates this year, even if its just more crap results. If they delay the 2022 results another month they could come in at the same time as the first quarter 2023 results are due. Maybe you can tell, I am not a happy bunny. As ever I am hoping to be proved wrong, C'mon Bogart with your usual BS, at least it cheers me up even if the feeling does not last long.
I don't have any sympathy with that. She should manage her case load better. All her cases have to progress through the legal process. She needs allocate enough time to each of them to keep them all moving along, not get bogged down on one case to the exclusion of everything else. Meanwhile she should have made a decision on YPF months ago. For a case in which the facts were not in dispute, the delay ludicrous (I'm trying to find right non four letter word for it). A lot of money is hanging on this but we have no idea what is going on. Very frustrating, infuriating. Maybe she will get picked off by the Argies, if they get to her before irate shareholders. Then we have to start over. Just great.
Yes, apologies. Just scratching around for an explanation for J Preska's interminable delays. As someone else said it is possible that she is attempting "shadow litigation". As she has numerous case against the Argies perhaps she wants to ensure that they each get a fair bite out of the pie (such as it is). If she simply lets loose the hounds of BUR enforcement department there will only be a few bones left. Another thing is that BUR will get persistent questions about the case on results day. They will have to say something. Even if they said they couldn't comment for confidentiality reasons, that would confirm that something is going on.
Just had the slightly worrying thought that Lovely Loretta has decided to await the Supreme Court's decision before issuing her decision on the YPF case. Then again, as I understand it, BUR owns the Petersen claim (alright, part of it) rather than just receiving a portion of the damages. So the Supreme Court case might not be relevant?
It is incorrect to infer from the dire situation with Argie sovereign debt, that this will mean that it will be nearly impossible to collect on any judgement in BUR's favour. The point is explicitly explained on page 64 of the 2019 Accounts. Quote: (unlike sovereign debt) : " ....A claimant like Petersen is entitled to take advantage of the full range of global enforcement options once it has a judgement in hand. That process operates entirely separately from any kind of sovereign debt resolution process ....".
I hope that this reassures those who watched the Utube video, because that focusses primarily on the sovereign debt situation and Peso currency devaluation.
That doesn't make any sense. There has already been an unacceptable delay in deciding this case. If the case goes against them the Argies were always going to kick up about it. Did anyone really not know that? So how can a further delay make any difference? Guilty parties usually strongly disagree when the decision goes against them. Strange, that.
Alright, J. Preska has got her other caseload to deal with but 6 months is too long to wait for a decision. What could be holding things up? Could it be that she is contemplating awarding punitive damages? Let's go over this, one more time….
The Argies actions in their 2012 take over of YPF amounted to premeditated ruthless expropriation. The facts are not contested. From the start the Argies knew that they could not afford to pay compensation in accordance with YPF’s statutes. But they went ahead anyway. Under threat of a court ruling following litigation from former controlling shareholder Repsol, they were forced to settle with that company. But ever since then the Argies have dodged and weaved to avoid the offering other shareholders anything. As a consequence the Spanish minority investors (“Petersen”) went bankrupt, and their interests were acquired by BUR. Maybe J Preska thinks that just paying in accordance with YPF statutes would not recognise sufficiently Argies responsibility for forcing an investor into bankruptcy, and for wilfully disregarding minority shareholders rights . Hence the basis for punitive damages that would go beyond loss suffered, in order to punish bad behaviour and be a deterrent to behaving in that way in future.
Apparently in the US there is an informal ceiling on punitive damages, and that is 4 times the compensation due. In their final submission BUR claimed $8.4bn so a doubling of that figure is very possible. That is before adding pre judgement interest of 9% (over 10 years), and that alone would come close to doubling the compensation element of the claim. Total all that up and you get to about $25bn.
Before we get too excited, we have to remember that the net to BUR entitlement is roughly 40% of the total, or $10bn. Probably Cristina has been a big influence in resisting settlement but now that she has been convicted of fraud she is on the way out. A settlement offer in near cash of say 50% ($5bn to BUR) now seems possible. Such a pathetic offer would hardly be punishment for the crime, but even that is 2.5 times present market value of BUR.
Silly me! When BUR announce that their EBT was going to buy 400,000 BUR in December I assumed that the SP would rise. So I bought a few more. Sucker! Hey! this is BUR, after a brief flurry, the SP fell. I am baffled as to how to explain this. Why would anyone sell at this point, and at the current price? Perhaps its a distressed seller being forced to liquidate, although volume not unusual. Hope Friday's drop means that they have cleared the holding. Meanwhile assuming 200,000 shares out of the 400,000 are to be purchased on NYSE, that would leave only about 100.000 still to be purchased on LSE?
I expect that with their usual efficiency BUR will be geared up already for quarterly reporting for 2023. So they could probably report Q3 2022 results in a few weeks time if they wanted to. What might give them reason for delay is the absence of Preska's judgement. The accounting and financial effects of that will now fall into Q4. If she delays any longer than that surely someone will be tempted to ...insert your own rude comment...The point is that if Q3 22 is not an improvement on the disappointing first half BUR may decide to hold off reporting in the hope that the judgement will be announced within the next month. In that case crap results would be forgiven amongst the (hopefully) exciting news.
This further delay is very very frustrating. J Preska could easily have issued her decision before now and pre-empted this Amicus Curiae thing. If there is a clear breach of contract (as a lot of us here believe) and the facts are not contested, why does the judge have to keep spinning the wheels. Slow justice is no justice. Its 10 years since the breach of contract occurred. She must have read the briefs for the various hearings, and heard all the arguments or was she having a good snooze? For f***s sake just get on with it.