RE: Would Arg pay?11 Oct 2022 10:57
With the next Argentinian presidential elections scheduled to be held on 29 October 2023, it is more than likely that the current president (Alberto Fernández) will to want to delay any unfavourable court decision that are made against his country. In doing so, his initial thoughts may be to kick the can further down the road until next years elections are over. In principle this may seem like a good idea as no incumbent party would want to pay billions of dollars in compensation during their watch in office. Indeed, who's to say that his party will be re-elected and he will continue to remain in power and have to make a decision at all.
Unfortunately for Argentina and very fortunate for Burford Capital/share holders, the court judgment is immediately enforceable unless Argentina posts a bond or obtains a stay. Additionally, Judge Preska (knowing that Argentina will duck and dive wherever possible) could award additional interest payments until the balance of the award has been paid in full or an agreed settlement has been made.
My personal view is that an agreed settlement is still the best way forward for all parties. A win for the current president in that he will be seen to be saving his country billions of dollars in negotiated (less) compensation. Additionally, a win for the US justice system (and Burford) in that it will be a landmark ruling setting a precedent for any sovereign nation that seeks access to the U.S. capital markets only then to expropriate a NYSE-listed company without compensation to the shareholders.
Either way if Argentina loose the court decision, I can see no way out for them not to pay other than face the wrath of the US judiciary system or future dollar sanctions.
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