YPF Seeks Waivers on Debt Repayment Rights After Seizure

YPF Bondholders Lose Faith in Takeover Clause: Argentina Credit
The YPF SA refinery stands in Lujan de Cuyo, Argentina. Photographer Walter Moreno/Bloomberg

YPF SA, Argentina’s largest oil producer, is asking creditors to issue waivers on part of its $1.6 billion debt after the government’s takeover and said it risks being delisted from the New York Stock Exchange.

Terms on a “significant portion” of the debt allow creditors to seek early repayment after a nationalization, YPF said in a 20-F filing to the U.S. Securities and Exchange Commission today. The company also said it risks the delisting because it hasn’t had an audit committee, as required by the NYSE, since the government took over on April 16.

Management is “actively pursuing formal waivers” from creditors, YPF said. “In case those waivers are not obtained and immediate repayment is required, the company could face short-term liquidity problems.”

YPF’s American depositary receipts dropped 7.3 percent to close at $13.18 in New York, after earlier sliding as much as 17 percent. The shares have slumped 62 percent this year.

Argentine President Cristina Fernandez de Kirchner took control of YPF on April 16, seizing 51 percent of the company’s shares from Spain’s Repsol YPF SA. YPF has since been under government oversight until a general shareholders meeting scheduled for June 4 names new management.

YPF will appoint an audit committee at the shareholders meeting and the company will seek to maintain its New York listing, it said in an e-mailed statement today.

Legal Action

Fernandez named Planning Minister Julio De Vido and Deputy Economy Minister Axel Kicillof to run the company for 30 days. Their mandate was extended today for another 30 days. On May 4, Fernandez named Miguel Galuccio, a former Schlumberger Ltd. executive, as general manager of YPF.

The Argentine government accused Repsol, which owned 57 percent of YPF until the nationalization, of underinvesting in the company since it took it over in 1999. Repsol on May 15 started legal action against Argentina and notified officials of the South American country that it intends to file a claim with the World Bank’s International Center for the Settlement of Investment Disputes in Washington.

Repsol has said its 57 percent stake is worth $10.5 billion, according to the valuation criteria in Argentine takeover law. Kicillof said April 18 the country will make its own assessment of the value of YPF after analyzing the company’s “secret information.”

Argentine oil output declined to 35.3 million cubic meters in 2010, from 45.4 million in 2001, according to data published by the Argentina Oil and Gas Institute. YPF produces about 34 percent of the country’s crude.

Fund Stake

Hedge fund Eton Park Capital Management LP raised its stake in the company by 18 percent to 11.95 million ADRs in the first quarter, according to a regulatory filing. The fund is the fourth largest investor in YPF, behind the government, Argentina’s Petersen Group and Lazard Asset Management LLC, according to data compiled by Bloomberg .

YPF slumped 46 percent between Jan. 30, the day after newspaper Pagina 12 reported the company could be nationalized, and the day when the seizure was announced by Fernandez.

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