Uncertainty over fate of Argentina's YPF persists

BUENOS AIRES Thu Apr 12, 2012 9:21pm EDT

1 of 5. A YPF logo, of the Spanish-owned oil and gas group Repsol-YPF, is seen outside a gas station near downtown Buenos Aires, April 12, 2012. Shares in Argentina's biggest energy company YPF surged 8.3 percent higher in late afternoon trade on Thursday as investors maneuvered ahead of an expected government takeover of the company. YPF's stock has shed about 25 percent since the start of the year, hit by media reports saying the government will either expropriate or buy a controlling stake in the company, which is majority owned by Spain's Repsol.

Credit: Reuters/Marcos Brindicci

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BUENOS AIRES (Reuters) - Argentine President Cristina Fernandez made no announcement on Thursday regarding the future of YPF, the country's biggest energy company, despite persistent rumors that prompted a rebound in its battered shares.

YPF's shares (YPFD.BA) closed 7.4 percent higher on Thursday as speculation grew over a possible imminent state takeover. The stock is still down about 27 percent since January 1, however.

Local media have reported the government will either expropriate or buy a controlling stake in the company, which is majority owned by Spain's Repsol (REP.MC).

YPF has come under fierce state pressure to increase oil and gas production as costly fuel imports eat into Argentina's trade surplus. Fernandez nationalized private pension funds and the nation's flagship airline in 2008.

Some media said Fernandez would unveil her plan for YPF on Thursday evening, but she met with the governors of energy-producing provinces privately and made no statements afterward.

The Clarin newspaper initially reported that the government sent a bill to Congress to expropriate more than 50 percent of YPF's shares. But it later changed that to say the government "may have decided" to send the draft proposal.

No official bill from the executive branch was sent to Congress and a high-level source told reporters that at least five different versions related to YPF were being studied.

"We analyzed in depth the revocation of fields (operated by YPF). Everything is under review, but there is no bill," the governor of Jujuy province, Eduardo Fellner, told Reuters after meeting with the president.

Several provincial governments have stripped YPF of some key production licenses, citing insufficient investment.

YPF says it has fulfilled its investment and production commitments and vows to fight these moves in court.

'HOSTILITY'

Spain's industry minister, Jose Manuel Soria, alluded to Repsol's predicament in Argentina on Thursday.

"If somewhere in the world there are gestures of hostility toward Spanish companies' interests, the government interprets them as hostility toward Spain," Soria said, without referring specifically to YPF. "And if there are gestures of hostility, they will have consequences."

YPF was privatized in 1992 after 70 years as a state company.

Its shares ended Thursday at 123.00 pesos. Traders said a possible government intervention had already been priced in and investors were now trying to find a way to profit.

"The issue is what price will be paid for the company," said Guillermo Curutchet, an analyst at brokerage Sudamericana de Finanzas. "It's speculation at this point, but when the final announcement is made, investors should buy (the shares) because they will rise initially."

Repsol, which holds a 57 percent stake in the company, has been gradually reducing its holdings as it frees capital to invest in other emerging markets such as Brazil. Argentina's Eskenazi family holds 25.5 percent.

"Traders are expecting a government announcement and speculate that it will be a mixed (public-private) company," Jorge Alberti, an analyst at online brokerage ElAccionista, said earlier in the day.

Pro-nationalization posters were plastered on walls in Buenos Aires. One of them read: "YPF - neither private nor foreign. 100 percent public; 100 percent Argentine."

(Reporting by Walter Bianchi, Alejandro Lifschitz and Karina Grazina; Additional reporting by Andres Gonzalez in Madrid Writing by Hilary Burke; Editing by Andre Grenon and Ed Lane)

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