* Repsol sells 11.86 percent of YPF through Morgan Stanley
* Says to make $622 million pre-tax capital gain
* Sale follows Argentine compensation for 2012 YPF seizure
* Repsol shares up 0.4 percent
(Adds Morgan Stanley comment on stake placement)
By Tracy Rucinski
MADRID, May 7 Spanish oil major Repsol
bid farewell on Wednesday to 15 years of business in Argentina
with the $1.3 billion sale of a stake in energy firm YPF
, opening a new era that is likely to focus on
The sale through Morgan Stanley, which follows a $5
billion settlement with Argentina over its 2012 expropriation of
a 51 percent stake in YPF from Repsol, ends a thorny chapter in
the Spanish company's history.
Morgan Stanley placed the YPF stake in a block trade in the
market overnight, spokesman Michael Wang said. Earlier, Repsol
issued a statement saying it had sold the stake to Morgan
Madrid-based Repsol has been seeking growth opportunities in
exploration and production as it tries to increase hydrocarbons
output. YPF had accounted for over half of Repsol's production.
"We see the (YPF) divestment as a sensible move ... and the
realization of material cash will add to expectations that
Repsol may be near to reinvesting proceeds in an acquisition
opportunity," said Deutsche Bank analysts, who have a "hold"
rating on Repsol shares.
Repsol Chairman Antonio Brufau had said the company would
look for growth in OECD countries, with analysts tipping the
United States, Canada and Norway as possible target markets.
In a regulatory filing on Wednesday, Repsol said it would
make a $622 million pretax capital gain from the sale of the
11.86 percent stake, which leaves it with under 0.5 percent of
Analysts said the sale was neutral from a valuation
perspective and did not change Repsol's investment case, but was
positive in the sense that it leaves Argentina firmly behind. By
1313 GMT, its shares were up 0.4 percent at 19.39 euros each.
Brufau's predecessor, Alfonso Cortina, bought 98 percent of
YPF in 1999 with a view to turning refining-focused Repsol into
a big league integrated oil and gas player.
However, Argentina's financial crisis in 2001 and 2002, and
the election of populist President Nestor Kirchner in 2003, led
to higher taxes and price caps, which meant YPF received well
below world prices for the oil and gas it pumped.
By the time Brufau was appointed, the deal was viewed as a
failure. In one of his first press conferences after replacing
Cortina, Brufau said the company was too reliant on Argentina.
PASSING THE BATON?
"Mr. Brufau has executed everything he had set out to do
after YPF was expropriated, from making asset disposals to
strengthening the balance sheet," Raymond James analyst Bertrand
Last year Repsol sold its liquefied natural gas
(LNG)business, under pressure from credit rating agencies to
shore up capital after the loss of YPF.
Any future acquisition will focus on assets that offer
instant cash flow to compensate for the cash-generating LNG
division, the absence of which is expected to weigh on Repsol's
first quarter results due on Thursday, analysts said.
The results publication coincides with the day Repsol is set
to receive Argentine dollar-denominated bonds for the YPF
Brufau has said he intends to sell the bonds within two
years and newspaper Expansion said the company was already in
touch with UBS, JP Morgan, Goldman Sachs and Deutsche Bank over
the imminent sale of a first tranche worth $1.5 billion.
(Additional reporting by Andres Gonzalez in Madrid and Freya
Berry in London; editing by Richard Pullin, Tom Pfeiffer and