YPF SA (YPFD), Argentina’s largest oil company, rose as much as 14 percent after newspaper Clarin said the government will propose taking a stake of as much as 50.01 percent, citing a copy of the bill it said was sent to Congress.
YPF soared 8.6 percent to $22.93 in New York after earlier gaining to as high as $24.05. Any acquisition of 14.9 percent or more would require the government to make a public offer to all shareholders, according to YPF norms that were created when the state-run company was sold to investors in the 1990s.
“This would mean the government will probably need to spend a huge chunk of international reserves, not only to buy the company, but also to run it and continue the investment plan,” said Diego Giacomini, an economist Economia & Regiones in Buenos Aires. “This is a short-sighted policy that will end up hurting the Argentine economy and relations with investors and the international community,”
President Cristina Fernandez de Kirchner’s proposal would declare that as much as 50.01 percent of YPF’s shares are in the “public interest,” Buenos Aires-based Clarin said. Fernandez allies control a majority in both houses of congress. Argentina newspapers Pagina 12 and El Cronista have reported since January that the government planned to nationalize YPF.
Officials at Congress said they haven’t received a copy of Fernandez’s legislation.
The proposal would allow Argentina to buy the full 100 million shares owned by the Eskenazi family’s Petersen Group and another 96.6 million from controlling shareholder Repsol YPF SA (REP), Clarin said.
YPF has 393.3 million shares outstanding, according to data compiled by Bloomberg. Madrid-based Repsol owns 57 percent of YPF.
Lost Market Value
The bill comes after more than two months of government pressure on Buenos Aires-based YPF to boost production and investments. Provincial governments revoked 15 of YPF’s 104 oil field licenses, or 16 percent of its production, since March 13.
YPF shares have dropped 43 percent since Jan. 23 as the dispute with the government intensified. The company’s market value fell to $9.14 billion from $16.2 billion in that period.
The largest and most recent license withdrawal occurred yesterday when the southern province of Santa Cruz pulled three permits that represent about 11 percent of YPF’s output.
The government representative on YPF’s board also asked the company to skip paying dividends with last year’s profit and use the funds to invest in exploration and production. Instead, the board proposed to issue new shares, a plan that requires shareholders’ approval at a meeting on April 25.
Following its sale to private investors in the 1990s, the government retained a 0.2 percent stake and a so-called golden- share that entitles it to make certain decisions, including veto takeovers.
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