Burford Capital Limited, a global provider of investment capital and risk solutions for litigation, is pleased to announce that the offering of $40 million in contingent preference shares by a wholly-owned subsidiary of the Company has been fully subscribed.
The issuance of the contingent preference shares – through which institutional investors agree on demand to provide up to $40 million in additional capital to the Company – is consistent with Burford’s prior public statements about its capital structure plans.
The completion of the offering is contingent on the admission of the Units to the Official List of the Channel Islands Stock Exchange, for which application has been made and is expected to occur on or around November 29, 2013.
The mechanics of the offering involve the incorporation of a wholly-owned subsidiary, BC Capital Limited (the “Issuer”), which has applied to the Channel Islands Stock Exchange (the “Exchange”) for the listing of 400 Units (Contingent Partly-Paid Preference Share Units or “COPPS”, “Units” or the “facility”) with a nominal value of $100,000 each, representing on issue ten A Preference Shares and zero B Preference Shares. Holders of the Units will be liable to meet calls on those Units as made. Further details of the facility are contained in the listing documentation to be made available on our website prior to a listing of the Units being achieved on the Exchange. There is no assurance that admission to listing will be granted.
Litigation finance investments tend to be medium term in duration and come with some uncertainty around the timing and quantum of their cash inflows and outflows, which means there is potential for a substantial gap between cash committed to investments and cash actually deployed. As it is inefficient to reserve dollar for dollar against future commitments, the Company believes that the facility offers an innovative alternative to manage the uncertainty around cash flows.
Burford has privately consulted a number of its shareholders and received support for the issuance of the Units from shareholders representing a clear majority of the ordinary shares in the Company.
Source: Burford Capital Limited
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