New York District Judge Loretta Preska ruled this Friday against Argentina in the case being followed in New York for the nationalization of YPF, carried out in 2012 under the government of Cristina Kirchner. The judge ruled in favor of the plaintiff fund, Burford, and set the amount of compensation for economic damages that the country must face at US$16,000 million.
After eight years of litigation and after the trial was held for 3 days in July, the new adverse ruling was announced. Argentina will appeal in October through the Treasury Attorney General’s Office, announced the presidential spokesperson, Gabriela Cerruti.
Read also: DOLLAR TODAY, minute by minute: the blue, the official and all the quotes
“The Argentine government will immediately appeal the ruling of Judge Loretta Preska. President Alberto Fernández analyzed the issue with the Treasury Attorney General’s Office. We will continue to defend energy sovereignty and our state company YPF against vulture funds,” said the official as soon as the decision was known.
The appeal may arrive in October, it will be the next government that will have to define whether it negotiates with the plaintiff fund or takes the case before the US Supreme Court of Justice, explained Sebastián Maril, from Latam Advisors, to TN.
The expropriation of YPF was carried out in 2012, under the presidency of Cristina Kirchner, and was paid in 2014 when Axel Kicillof was already Minister of Economy. (Photo: NA).
Although in 2014 the country paid the Spanish company Repsol for the expropriation of 51% of the shares, a minority group of shareholders initiated legal action against the country because they were harmed after the official maneuver. What was at issue in this litigation is the date on which Argentina took effective control of the oil company’s shares. According to the plaintiff fund, Burford, it was on April 16, 2012, when the YPF expropriation project was submitted to Congress. For Argentina, that date was May 7 of the same year.
Preska explicitly excluded the company from the lawsuit. She considered that the Argentine State “indirectly” took control of the oil company on April 16, so the economic damages must be calculated “using the highest price/income ratio during the relevant period.”
Thus, without mentioning the amount of compensation, but he did lean towards a penalty of 8% in interest, which brings the sum closer to what the plaintiffs were demanding, US$16.1 billion. Until now, Argentina has recognized damages of US$4.92 billion.
Judge Loretta Preska must rule in the trial against the Argentine State. (Photo: The New York Times).
Although the sentence was expected between the end of August and the beginning of September, the definition was delayed, although it arrives in the middle of the electoral campaign. It did not happen like in 2015, Maril recalled, when Judge Preska herself decided to suspend all litigation because Argentina was about to hold presidential elections.
Given the appeal, Burford will surely go for the seizure of Argentine assets abroad because he has the right to do so. Just as it happened in 2012, when the Frigate Libertad was detained in Ghana due to the country’s unpaid debts, Maril explained.
In the event that Argentina gives up appealing and decides to pay – although it still has numerous legal avenues to explore – the specialist said it could cancel the obligation through a direct placement of bonds, such as those it gave to Repsol in 2014.
Read also: The owner of the highways took Argentina to court: what are the other cases before the ICSID and for how much
How the trial for the expropriation of YPF was born
At the time of the nationalization of YPF, the Eskenazi family had a minority stake in the state oil company through two companies. According to the company’s statute, if Argentina (or any shareholder) attempted to take control of the company, it had to make the same offer to all other shareholders, through a public takeover offer.
The nationalization of YPF was carried out through the expropriation of the shares that were in the hands of the Spanish company Repsol. (Photo: Carlos Brigo/Télam).
The country did not follow that protocol. On the contrary, he took control of Repsol’s shares and kept the majority stake in the company. That was the reason that started the trial that is still ongoing and for which YPF, as a company, was exonerated. Over time, the Eskenazi family sold the lawsuit to Burford, who is now litigating against the country.
How did YPF do this year?
Away from the litigation, on Thursday, August 10, YPF presented its results for the second quarter of 2023. An analysis carried out by Grupo SBS highlighted that the oil company recorded a net profit of US$380 million in that period, which meant a year-on-year decline. of 53.1%, mainly explained by a drop in billing.
For its part, revenues reached US$4,375 million and registered a drop of 12.4% compared to the second quarter of 2022. In financial matters, free cash flow was negative for the third consecutive quarter at US$284 million. This indicator was affected by the closure of the trial with Maxus.
The president of YPF, Pablo González. (Photo: Juano Tesone/Clarín).
At that time, the company released a statement in which it highlighted the 60% increase in dollars in investments during the first six months of the year. In addition, he highlighted that oil production had a growth of 7% year-on-year and that after 18 years YPF returned to export Neuquén crude oil.
“Total shale production reached a new record and during the second quarter it represented 45% of YPF’s total production. The production of unconventional crude oil showed a growth of 28%, while the production of unconventional gas increased by 10%, compared to the same quarter of the previous year in both cases,” added the official information.
2023-09-08 16:25:42
#Trial #expropriation #YPF #ruling #York #orders #pay #US16000 #million #Argentina
