July 24 (Bloomberg) -- YPF SA, the nationalized Argentine oil producer, is replacing two board members at its Metrogas SA joint venture with BG Group Plc as it prepares to take over the bankrupt natural-gas distributor, an executive with knowledge of the plan said.
The replacement of the board members was approved in a shareholders meeting today, the person said, declining to be named because the plan isn’t public. The new board members will help prepare the company for a takeover as early as mid-August, the person said. Anses, the state-owned pension system, is replacing one board member, he said.
Argentina President Cristina Fernandez de Kirchner is tightening control over the South American country’s energy industry after price caps discouraged investments and squeezed profit margins in past years. In April, the government seized a 51 percent stake in YPF from Spain’s Repsol SA.
BG, of the U.K., has sought damage payments from the Argentine government since 2007 because of losses caused by the price caps. On Jan. 21, a federal judge in Washington upheld damage claims of $185 million. BG shut its Buenos Aires office in 2009.
BG controls Metrogas through a 55 percent stake in parent holding company GASA, which defaulted on $70 million of debt in 2002. YPF owns 45 percent of GASA. Metrogas, which filed for bankruptcy protection in 2010, has total outstanding debt of 1.13 billion pesos ($250 million), according to data compiled by Bloomberg.
Neil Burrows, a London-based spokesman for BG, and Alejandro Di Lazzaro, a YPF spokesman in Buenos Aires, declined to comment on the takeover plans. Di Lazzaro confirmed the replacement of the board members.
Investors holding about 90 percent of Metrogas’s debt unanimously approved the terms of a restructuring plan last month. The accord includes swapping bonds for new debt maturing in 2018.
Metrogas posted a loss of 18 million pesos in the first quarter.
State-owned Banco de la Nacion Argentina will lend Metrogas 30 million pesos as part of the takeover plan, the executive said.
The new board directors replaced three lawyers who were representing YPF and Anses, a sign that Metrogas no longer is a legal concern for YPF, the executive said.
Cristian Girard, who had been mentored by Economy Minister and YPF board member Axel Kicillof, will represent Anses, the executive said. Gustavo Di Lucio, a YPF long-time executive, and Pablo Vera Pinto, a former McKinsey associate who recently joined YPF, will represent YPF on the board, spokesman Di Lazzaro said.
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