Thursday, July 18, 2024

ECONOMY | 16-09-2023 08:01

US judge orders Argentina to pay US$16.1 billion for YPF expropriation

US federal judge Loretta Preska says government must pay nearly US$16.1 billion to two companies that were not compensated as minority shareholders for the 2012 nationalisation of the YPF oil giant; Argentina vows to appeal ruling.

A US judge on Friday ordered Argentina to pay nearly US$16.1 billion to two companies that were not compensated as minority shareholders for the 2012 nationalisation of the YPF oil giant.

In a ruling that expanded on a prior judgment in favour of Petersen Energía and Eton Park Capital, US federal judge Loretta Preska set the amounts that Argentina must pay the two firms US$16.099 billion in compensation.

The sum, a consequence of then-president Cristina Fernández de Kirchner's decision to nationalise the oil firm, will be paid to US investment fund Burford Capital, which bought the rights to the legal claims some years ago.

Preska ordered Argentina's government to pay US$7.533 billion in damages and US$6.85 billion in interest (eight percent) to Petersen Energía.

She also ordered Argentina to pay about US$1.714 billion, between damages and interest (US$897 million, US$816 million interest, respectively), to Eton Park Capital.

The judge also ruled that the two companies are entitled to receive post-judgment interest of 5.42 percent per annum until the ruling is complied with.

The case dates back to Argentina's 2012 expropriation of 51 percent of the shares of leading energy company YPF, which was partially controlled by Spanish giant Repsol.

Argentina, in the grip of an economic and political crisis with runaway annual inflation of over 120 percent, said on August 9 that it would appeal the ruling. It has 30 days to do so.

In the judgment, Preska also ruled that all other claims by the plaintiffs "are dismissed and that all of plaintiffs's claims against defendant YPF SA are dismissed" against the Argentine state and the oil firm.

The expropriation case was brought in US courts because YPF shares trade on the New York Stock Exchange.

In her August 9 ruling, the judge said she had accepted the arguments of the plaintiffs, including the law firm Burford Capital, which had purchased the litigation rights for US$16.6 million.

Burford specialises in buying litigation and paid out to fund the suits so it could be the main beneficiary of this ruling.

Two years after Argentina's nationalisation of YPF, Repsol, the Spanish giant, was compensated with US$5 billion to settle litigation.

Not so other minority shareholders such as the Petersen Group or Eton Park Capital – which together held 25.4 percent of YPF's capital – and in 2015, they filed a lawsuit, in 2015 alleging that the country had not submitted a takeover bid as provided by law.

At the time, then-economy minister Axel Kicillof said the requirement would have been a "trap" and only a "moron" would expect Argentina and YPF to comply with it.

In June 2019, the US Supreme Court rejected Argentina's request for the dispute to be heard in US courts, and last March, Judge Preska ruled that Argentina was liable for the losses suffered from the nationalisation of the oil company.



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