On the morning of Monday, when it was learned that the Supreme Court of the United States rejected Argentina’s request for the YPF case to be dealt with in Buenos Aires, the Burford vulture fund had extra reasons to celebrate. Minutes after the news is known, this firm specialized in detecting legal cracks to make juicy profits, sold in the market 10% of its rights in the Petersen case at a price of US $ 100 million. He had already sold another 30% before. So far, Burford has generated $ 236 million of revenue from the Petersen case sales. And still retains 61.24% of its original right.
If the amount of this gain is already impressive in itself, the astonishment grows knowing that in 2015, when Burford bought the rights of the trial, just put US $ 15 million. In four years and selling only 40% of its tenure, this fund multiplied its initial investment by 15.
The claim behind this trial reaches US $ 3,000 million. This fund purchased part of the litigation rights of two Spanish companies, Petersen Energía and Petersen Energía Inversora, which owned 25% of YPF. Originally, the two companies had belonged to the Eskenazi group. In addition, Burford bought 70% of the litigation rights of Eaton Park, owner of another 3% of YPF.
In 2008 Néstor Kirchner promoted the “Argentinization” of YPF and agreed that the Spanish company Repsol would sell 25% to the Eskenazi. To buy it they took credits from Repsol itself and from a series of banks (Goldman Sachs, Santander and Citi, among others). The repayment of these loans was tied to YPF’s dividend distribution.
In 2012 Kirchner nationalized 51% of YPF that was in the hands of Repsol. Two years later, the then minister Axel Kiciloff paid compensation of US $ 5,000 million to Repsol.
This operation opened the door to the claims, under the argument that the YPF statute established that if the majority shareholder package changed ownership, the new owner was obliged to make an offer to the minor shareholders.
In Spain, the two Petersen group companies declared bankruptcy when they stopped receiving dividends. In 2015, the Burford group bought 70% of the bankruptcy management rights from the Spanish justice system. He put in $ 15 million and brought the case to justice in New York.
“Argentina has already lost to justice in the Southern District of New York, in the Court of Appeals and in the Supreme Court, we go 3 to 0. Not everything is lost, but the chance of victory is minimal,” said Sebastián Maril , analyst at Research for Traders and specialist at YPF.
But in addition Burford has one more instance to continue collecting at the expense of the Argentine state. It also owns 70% of the demand of Eaton Park, which claims YPF US $ 495 million for the damages caused by the expropriation. “The vulture fund will ask Judge Loretta Preska to consolidate the Eaton Park case, which is now in a more delayed instance, and add it to the Petersen trial,” Maril said.