Argentina's YPF Acquires Option To Raise Stake In Metrogas
June 06 2011 - 5:01PM
Dow Jones News
Argentina's largest oil and gas producer, YPF SA (YPF, YPFD.BA),
has acquired an option to raise its stake in Argentina's biggest
natural-gas-distribution company, Metrogas SA (METR.BA).
Metrogas said Monday in a statement to the Buenos Aires Stock
Exchange that YPF Inversora Energetica, a unit of YPF, has obtained
the right to buy a 54.7% stake in Metrogas from the U.K.'s BG Group
PLC (BG.LN, BRGYY).
BG owns the stake through the holding company Consorcio Gas
Argentino Sociedad Anonima, or GASA.
GASA owns 70% of Metrogas, while 20% of the shares are traded in
Buenos Aires and New York, and 10% are held by employees. YPF
already has a 45.5% stake in GASA.
YPF has until Aug. 31 to exercise the option, though that period
can be extended to Oct. 5, according to the statement. YPF itself
is a unit of Spain's Repsol YPF SA (REP.MC, REPYY).
A year ago, Metrogas filed for bankruptcy protection, leading
the government to step in to manage the firm.
Following the bankruptcy filing, ratings agency Standard &
Poor's lowered its already low CC rating on Metrogas' $250 million
debt to D. The company suffered from "the mismatch between revenues
and costs during 2002-2010 due to a combination of frozen tariffs,
high inflation, and currency devaluation," according to Standard
and Poor's.
Public service companies such as Metrogas have struggled since
Argentina's 2001-02 economic meltdown, when the government froze
most utility rates. The government has since renegotiated some, but
not all, operating contracts.
While many rates have remained frozen, operating costs have
skyrocketed amid rising inflation.
But government officials have criticized many of the companies,
including Metrogas, and said their financial troubles are not
related to government policy.
Metrogas serves more than 2 million customers under a 35-year
exclusive license to distribute natural gas in the Buenos Aires
metropolitan region, Argentina's most densely-populated area.
-By Taos Turner, Dow Jones Newswires; 5411-4103-6728;
taos.turner@dowjones.com