16 May 2012 17:30 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--Repsol YPF, the large Spanish oil company, has filed a class-action lawsuit against Argentina for seizing control of YPF, in which Repsol held a majority stake, the company said on Wednesday.
The lawsuit, filed in US District Court in Manhattan, is part of Repsol's effort to recover damages from Argentina over the expropriation.
"In addition to yesterday's announcement on the start of the international arbitration procedure, we have also now filed a class action in the US," a representative from Repsol said. "In this action we are seeking compensatory damages and will continue to aggressively pursue the interests of our shareholders."
In the complaint, Repsol and the money manager Texas Yale Capital alleged that Argentina defaulted on its promise to tender for Class D shares of YPF if it ever took back control of the company.
The lawsuit said Argentina did not fulfil "the contractual obligations that it undertook when it chose to enter the US to raise capital through the initial public offering of its formerly state-owned oil company, YPF".
"To induce investors to purchase shares in that former state enterprise, Argentina undertook the contractual obligation to launch a tender offer to all holders of Class D shares of YPF if it should ever in the future seek to retake control of the company," the lawsuit said.
Argentine president Cristina Fernandez de Kirchner announced the seizure of 51% in YPF from Repsol on 16 April, effectively expropriating the company.
The takeover follows more than two months of government pressure on YPF, a unit of Spain's Repsol YPF, to boost investment and output.
The stake in YPF gives the Argentine government access to its shale oil reserves and natural gas production.
"Argentina's failure to launch a tender offer despite having retaken control over YPF constitutes a breach of its contractual obligations to other shareholders," the lawsuit said.
Repsol and Texas Yale seek compensatory damages, a requirement that Argentina launch a tender offer and other remedies.
On Tuesday, Repsol said it had notified Argentina of a dispute under the jurisdiction of the Treaty for Investment Promotion and Protection agreed between Spain and Argentina. The formal dispute is a necessary step for arbitration at the World Bank's International Center for Settlement of Investment Disputes.
Six months must pass before ICSID will consider arbitration in any dispute, to allow negotiations between the two parties.
Texas Yale Capital could not be reached for comment.
Representatives for the Argentine government did not return phone calls and email for comment.
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