Cristina Fernandez, President, Argentina.
BUENOS AIRES, ARGENTINA: Cristina Fernandez, President, Argentina unveiled plans to seize control of leading energy company YPF, controlled by Spain’s Repsol, drawing swift warnings from key trade partners and risking the country’s further economic isolation. Until recently, YPF had a harmonious relationship with Fernandez, she praised YPF when it found massive resources of shale oil and natural gas in late 2010. However, a surging fuel import bill has pushed a widening energy shortfall to the top of her agenda at a time of worsening state finances in Latin America’s No 3 economy.
According to Fernandez the government would ask Congress, which she controls, to approve a bill to expropriate a controlling 51 per cent stake in the company by seizing shares held exclusively by Repsol. YPF’s market value is $10.6 billion, although an Argentine tribunal will be responsible for valuing the company as part of the takeover. “If this policy continues, draining fields dry, no exploration and practically no investment - the country will end up having no viable future, not because of a lack of resources but because of business policies,” said Fernandez.
Repsol described Argentina’s move as clearly unlawful and seriously discriminatory and said it would take legal action. Under the terms of the bill, the government would hold 51 per cent of the expropriated shares and the rest would be held by the country’s energy-producing provinces. All of the shares targeted by the government belong to Repsol, which owns 57 per cent of YPF. Repsol’s Argentine partner, the Eskenazi family’s Grupo Petersen, will not be affected. Petersen owns a 25.5 per cent stake in YPF.
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