YPF Names M&A Manager to Sell $1 Billion in Non-Core AssetsBy
Luis Sas, former Petrobras Argentina CFO, will report to CFO
Oil giant looking to sell Metrogas, Profertil, cut debt load
In its second step toward divestment of non-core assets, YPF SA, Argentina’s biggest oil company, has appointed a head of mergers and acquisitions, two people with knowledge of the plan said.
Luis Sas, former Petrobras Argentina SA chief financial officer, was recruited this month as finance and M&A manager to sell the company’s controlling stake in the gas distributor Metrogas SA before year-end, according to one of the people, who asked not to be named because talks are ongoing. YPF is also looking for bidders for the company’s co-controlling stake in fertilizer producer Profertil SA, both people said. The position is newly created.
Earlier this year, YPF turned over control of these subsidiaries to CFO Daniel Gonzalez Casartelli, a former M&A banker, in a first step toward divestment of these non-core assets that could bring in at least $1 billion in the near term. One of the main purposes of the divestment is to cut the company’s $7.7 billion debt. Gonzalez was Bank of America Corp.’s head of mergers and acquisitions for Latin America before becoming YPF’s CFO in 2012. Sas will report to Gonzalez.
YPF didn’t immediately reply to emails seeking comment. Sas, who was also CFO of Buenos Aires electricity distributor Edesur SA from 1999 to 2001, said he was not available to discuss matters by phone and didn’t immediately reply to an email seeking comment.
"The Argentine regulator has requested YPF to fulfill the current law that rules that natural-gas producers, like YPF, cannot have a controlling stake in a natural-gas distributor like Metrogas," said Florencia Mayorga Torres, an analyst at Buenos Aires-based brokerage TPCG Capital SA. "The regulator has not set any deadline for the divestment."
According to TPCG estimates, YPF could get more than $700 million for both assets, while AR Partners has said it may get between $1 billion and $1.5 billion.
Metrogas, which is controlled by YPF through holding company Gas Argentino SA, was allowed to lift its rates by as much as 54 percent earlier this year. That resulted in a net first-quarter income of 516 million pesos ($32 million), compared with a net loss of 586 million pesos in the same quarter of 2016.
The stock, owned by funds such as Moneda Asset Management SA, has gained 80 percent this year. The shares gained 1.8 percent in Buenos Aires on Friday to close at 22.90 pesos.
Profertil is owned half and half by YPF and Agrium Inc., which has right of first refusal.