Burford Capital Ltd announced yesterday that they have sold a further tranche of participation interests in possible future proceeds from its investment in the Petersen lawsuit. The Petersen lawsuit is a multi-billion dollar litigation against Argentina following its nationalisation of energy company YPF in 2012.
Liquidators Petersen Group originally held a 25% stake in YPF before its nationalisation forced the firm into bankruptcy. Spanish oil firm Repsol, held a 51% stake in the firm before the nationalisation, agreed a USD $5 billion settlement with the Argentinian government in 2014.
Burford has already sold 10% of the entitlement to participation in future proceeds. This interest was sold for USD $40 million. The second sale of their economic entitlement was announced yesterday on Tuesday the 13th of June 2017. This additional 15% was sold for USD $66 million.
Burford stated it has made this decision despite its “enthusiasm for the Petersen claims”, and provided further explanation by clarifying the sales are “prudent risk and balance sheet management transactions”. Given the risk of litigation they feel it necessary to take such action from time to time.
Burford Capital noted, they have agreed not to sell any more of its interest in the claim at an implied value of less than USD $600 million. Additionally Burford have stated they will reduce their interest in economic entitlement below 65% until after the end of 2018. Finally they have made promises to permanently hold at least 50.1% of the entitlement.