Latest update on proceedings, page-9

1) Somebody knew something: https://www.nasdaq.com/articles/do-options-traders-know-something-about-burford-capital-bur-stock-we-dont

2) From the announcement, Congo initiated the recent mediation discussions with SDL. This puts SDL in a better negotiating position. They had the option of pushing forward via legal proceedings for their full claim of US$8.76B (with a report from several independent experts valued project and damages ranging from $US1.5B to $US5.7B, depending on the iron ore price used). Maybe Congo (China) wanted this to settle and make this go away, rather than risk paying the upper end (or...reasons), since this is a strong case (according to SDL announcements) and they don't want to suffer the full loss. Ask yourselves this: "Why settle? Why settle, now after so long? How do they benefit?"

This, to me, all implies something of a competitive offer. Risk vs reward - For Burford to recommend to SDL to settle would mean to be satisfied with the offer (or, they just push forward with the November hearing and go for more money). Little risk in pushing forward and waiting to Novemeber for a shot a the big money. Also, remeber:

- It is in the interest of Burford to maximize the payout (larger return).
- It is in the interest of SDL maximize the payout (as Porter and GC are shareholders).
- It is in the interest of the Noteholders to maximize the payout (see point 4 below).

What is a competitive offer? Each to their own...but I'm going to use a value of $US5B of my calcs. Debate it until the cows come home, if you like, but talk of a low-ball figure when your lawyers say you have a strong case is being too pessimistic (imo).

3) For Burford costs: Maybe assume a variable structure and take an average of 35%.
https://www.burfordcapital.com/insights-news-events/insights-research/pricing-risk-structuring-agreements-and-the-cost-of-legal-finance-capital/

4) For Noteholder costs: Ahhh...the big question mark. Our best indication, see announcement 11 August 2021 -

"Noteholders will be entitled to receive an agreed portion of any damages recovered (i) as
compensation for their forbearance of their Convertible Notes and (ii) in repayment of the
redemption amounts owing under the Convertible Notes. Essentially, the agreed portion of
damages to which the Noteholders are entitled corresponds to the amount of damages awarded to
Sundance, with Sundance's recovery increasing as the amount of damages awarded in any of the
proceedings increases."

Total notes are $AUD132.86M. I have no idea what deal SDL came up with to get noteholders to indefinitely forbear on their Convertible Notes for the duration of the proceedings. I just hope it was fair, not like the arrangement of 12 November 2020, where they were going to get 14B shares and take the bulk of the company - if they got a similar deal here it would be very unfair to shareholders and more than halve our return. I bet the noteholders pushed for it, though! However, would like to I imagine a deal where they get (up to - on a sliding scale) 10 times their notes in return - so take off $AUD1.3286B = $US0.89B
(Again - Disclaimer - It's a guess; simply a figure representative of a very large number that takes away a large percentage from shareholder). Let's hope SDL didn't give them a deal on par with 12 Nov 2020. Please present alternate views.

5) Do the rest of the math yourselves

6) Add value and provide positive feedback to the conversation.