Argentina’s Metrogas Gains as Creditors Approve New Debt Terms

Metrogas SA (METR) rose the most in three weeks after holders of the Argentine company’s bonds approved a debt restructuring for the bankrupt gas distributor.

Metrogas, which operates in the capital city of Buenos Aires, advanced 7.7 percent to 0.56 peso for the biggest gain since May 24. The Merval index rose 3.6 percent.

Investors holding about $139 million of debt unanimously approved the terms of the restructuring, the company said yesterday in statements to the Buenos Aires exchange. The accord includes swapping bonds for new debt to mature in 2018, and will comprise haircuts of 53 percent for holders of class A bonds and 47 percent for holders of class B bonds, according to documents posted in February on the company’s website.

“This solves one of Metrogas’s main problems,” Marcelo Olguin, chief economist at Grupo SBS, said in a phone interview. Investors may also be betting that the company is in a good position to renegotiate tariffs that the government has frozen since 1999 to curb inflation, he said.

Metrogas, which filed for bankruptcy protection in 2010, posted a loss of 18 million pesos ($4 million) in the first quarter of the year.

Metrogas has total outstanding debt of 1.13 billion pesos, according to data compiled by Bloomberg.

The gas distributor is 70 percent owned by Gas Argentino SA, which is 55 percent controlled by BG Group (BG/) and 45 percent by YPF SA (REP), Argentina’s largest oil company, which the government nationalized in April.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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