YPF Slumps as Ruling Portends Compensation: Buenos Aires Mover

YPF SA, the oil company seized by Argentina’s government last year, fell the most among the country’s major stocks after losing an arbitration case that may cost it as much as $1.6 billion in indemnity payments.

The shares dropped 3.6 percent to 114.70 pesos at 4:59 p.m. in Buenos Aires, the steepest decline among 15 global peers tracked by Bloomberg. The Merval index gained 0.6 percent.

The Paris-based International Court of Arbitration found YPF responsible for rescinding on gas-export contracts in 2009 with AES Corp.’s Brazilian unit based in Uruguiana and Techint Group and Total SA unit TGM, YPF said in a note sent to the regulator after the close of trading May 24.

“The ruling is a black cloud on the company’s horizon and triggered the share price fall,” Carlos Aszpis, an equity strategist at Schweber & Cia. Sociedad de Bolsa SA, said by telephone from Buenos Aires.

Damages could be determined in a separate ruling by the same tribunal, the company said. In 2009, YPF was notified of claims by AES for damages totaling $1 billion while TGM sought $17 million in damages and $366 million in lost profit, according to a YPF filing with the U.S. Securities and Exchange Commission earlier this year.

Including past due interest, the amount would be $1.6 billion, Aszpis said.

The company, based in Buenos Aires, said it would analyze the arbitration ruling and energetically defend shareholders’ interests. Alejandro Di Lazzaro, a YPF spokesman, declined to comment further when contacted by telephone today.

Spain’s Repsol SA is seeking $10.5 billion in compensation from Argentina for the April 2012 nationalization of YPF. Under the previous management, YPF said it was the government not the company that was responsible for stopping gas deliveries.

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