REPYY Repsol SA (QX)

By Tapan Panchal

LONDON--Shares of Burford Capital Ltd. (BUR.LN) rose early Tuesday, after the company said it anticipates a significant jump in value of its investment in the Petersen claims lawsuit, a multi-billion dollar litigation against Argentina and the country's energy company YPF.

At 1009 GMT, shares were trading 9.6% higher at 628 pence each.

The litigation finance firm said it has sold a part of its interest in the possible future proceeds of the Petersen litigation, without disclosing how much. It added that based on the sale price, the value of its total investment to date in the litigation is likely to be more than ten times, or over $180 million, than the initial $18 million investment.

The company said it hasn't yet determined the exact impact of the sale on the total value of the Petersen investment, or on the company's earnings.

The Petersen claims relate to the nationalization of YPF by Argentina in 2012. At the time of the nationalization, Repsol (REP.MC) owned more than 50% of YPF and Petersen Group owned 25% of YPF.

Burford Capital was appointed by Spanish bankruptcy courts to provide financing to the liquidators of the Petersen Group, which went bankrupt after YPF's nationalization. The liquidators are proceeding with claims against Argentina and YPF before the United States District Court for the Southern District of New York.

Repsol settled its claims and received a payment of $5 billion from Argentina and YPF.

N+1 Singer expects the disposal of part interest to result in a material uplift to Burford Capital's consensus 2016 revenue, profit and year-end book value per share. The brokerage estimates the unrealized gain per share to be a little over 55 pence.

N+1 Singer retains its 'buy' recommendation on Burford Capital and a 583 pence target price.

Write to Tapan Panchal at tapan.panchal@wsj.com

(END) Dow Jones Newswires

January 03, 2017 05:30 ET (10:30 GMT)

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