Argentine Senate commissions approve YPF takeover

18 April 2012 22:32  [Source: ICIS news]

Argentina moves to take over YPFBUENOS AIRES (ICIS)--Three commissions of the Argentine Senate approved on Wednesday a bill allowing the state to take over YPF from Repsol YPF.

The Spanish-based energy producer owns a majority stake in the company.

The bill will now go to the full Senate for approval next week. If approved by the Senate, the bill will go before the Argentine House, the nation's second legislative chamber.

The bill needs approval from both chambers before it becomes law.

Argentine President Cristina Fernandez de Kirchner sent the bill to the Senate on Monday, under which the government would obtain a 51% stake in YPF.

The bill has received support from the political parties Frente para la Victoria, Union Civica Radical and Frente Amplio Progresista.

The bill was discussed by the three Senate commissions: Budget and Treasury; Mining Energy and Fuels; and Constitutional Issues.

On Wednesday, the members of the commission heard testimony from historian Nicolas Gadano; from former Energy Secretariats Jorge Lapena and Daniel Montamat; and from the governor of the Tierra del Fuego province, Fabiana Rios.

Lapena said the best way to address the issue was to reach a consensual purchase of YPF for a fair price.

Montamat said he did not see anything in the bill that would ensure the success of a government-controlled YPF.

“The project is born without a previous energetic strategy and it is in serious risk to entrap the new company in a short-term vision and in an administration that conditions it politically,” he added.

In other news, the government may attempt to takeover YPF Gas, a natural-gas distributor in Argentina, according to Senator Anibal Fernandez.

If Argentina proceeds with the YPF takeover, Repsol said it would fight to obtain what it called a fair price for its majority stake.

"Repsol will resort to international arbitration tribunals and seek to press individual charges, as well as class actions, anywhere and everywhere that can get us a result," said Kristian Rix, deputy director of international and financial media at Repsol.

The Argentine government still has not determined how much it would pay Repsol for its YPF stake.

Argentina will rely on "solid data" to value the takeover, and it will not use estimates provided by Repsol, said Axel Kicillof, Argentine deputy economy minister and one of the ministers appointed to lead YPF.

Earlier, Repsol had valued its YPF stake at $10.5bn (€8bn), based on a formula that assumes a share price of $46.55.

Investment bank UBS said estimated that Repsol may seek $18bn or more for its stake.

On Wednesday, YPF stock fell by more than 30% on the New York Stock Exchange as investors react to the government takeover.

Additional reporting by Franco Capaldo, Al Greenwood and Leela Landress

By Paula Krizanovic





AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index