Slim Family Still Considering Options for Its YPF Stake
Carlos Slim, the world’s richest person, hasn’t decided whether he intends to keep the stake in YPF SA (YPFD) that has made him the fourth-largest shareholder in the Argentine oil producer, his eldest son said.
“It was something that came up, not planned,” Carlos Slim Domit, the 45-year-old co-chairman of America Movil SAB (AMXL), said in an interview in Los Cabos, Mexico. “It’s a thing that happened, so we’re evaluating.”
Slim’s bank and a separate investment vehicle control 32.9 million of the Buenos Aires-based company’s Class D shares, or an 8.4 percent stake worth $375 million, YPF disclosed last week in a filing. The billionaire’s bank Grupo Financiero Inbursa SAB was among financial groups that received YPF shares as collateral after a default, Slim Domit said. The default was by the Petersen Group, run by Argentina’s Eskenazi family, according to the filing.
YPF has soared since Slim’s stake was disclosed, climbing 11 percent over the past three days to 75.5 pesos in Buenos Aires yesterday. Argentina seized 51 percent of YPF from Madrid- based Repsol SA in April as President Cristina Fernandez de Kirchner seeks to halt declining oil output and stem fuel imports. The Eskenazi-owned Petersen Group had used YPF dividends to meet obligations until defaulting in May on a $1 billion loan that used a YPF stake for collateral.
Slim, 72, has been dabbling in oil investments for years, including stakes in oil services company Bronco Drilling Co. in 2008 and Allis-Chalmers Energy Inc. in 2007. Both companies were later acquired.
Slim Domit said his father prefers placing his bets on infrastructure, a philosophy that colors his investments from YPF to phone carrier Telekom Austria AG. (TKA)
“We try to put it in a very simple way: We are committed to develop physical structure, physical capital, human capital,” he said. “It’s about development and continuous efficiency.”
The Slims’ strategy has led them on a wild ride in the past month, with an unrequited overture to the former Dutch phone monopoly, a deal to invest in Austria’s communications market, and the YPF stake that fell into their laps, Slim Domit said. The family is confident about its investments in Europe, even as the foray has sent shares of is wireless company, America Movil, plummeting, Slim Domit said.
The elder Slim’s fortune has climbed 11 percent to $68.1 billion this year, according to the Bloomberg Billionaires Index. About 60 percent of that comes from a controlling stake in America Movil, the largest phone carrier in the Western Hemisphere by subscribers. The rest is from a collection of mining, banking, retail, construction and other assets.
The billionaire’s holding company Grupo Carso SAB, of which Slim Domit is chairman, has an oil services unit which counts Petroleos Mexicanos as its client. The unit, which had sales of 3.1 billion Mexican pesos ($223 million) last year, announced it won a $205 million contract last week to provide three offshore platforms for Pemex, as the Mexican state-owned producer is known.
“Our activity has been more related to building oil platforms, building big-scale infrastructure projects,” Slim Domit said. “Usually this company has been very strong and very good for doing capital goods. We’re more in the building than in other things.”
America Movil is also an investor in infrastructure, spending more than $9 billion this year, with a similar amount budgeted for the next two years, to improve its network across Latin America. Now it aims to meld its strategy with its two European investment targets.
The carrier announced a $3.4 billion bid last month to increase its stake in The Hague, Netherlands-based Royal KPN NV (KPN) to as much as 28 percent. The wireless carrier had 8.5 percent of KPN as of yesterday.
America Movil agreed last week to buy a 21 percent stake in Telekom Austria AG from investor Ronny Pecik. Slim’s wireless company purchased 5 percent of the shares and will acquire 16 percent later this year after regulatory approval.
While Austria’s government, Telekom Austria’s largest shareholder, endorsed Slim’s investment, KPN’s management has said Slim’s offer is too low. The KPN offer concludes June 27.
“These are companies with very strong potential to develop and grow, and we can put together good synergies,” Slim Domit said. “To try to buy the company and get responsibility for operations is not our goal. It’s more in supporting the companies to grow.”
America Movil closed yesterday at 17.16 pesos, down 8 percent since the company announced its KPN investment on May 7.
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