YPF the oil company seized by Argentina’s government last year has lost an arbitration case with a Brazilian company that may cost as much as 1.6 billion dollars in indemnity payments. There was an immediate reaction and YPF shares lost the most among Argentina’s major stocks, 3.6%.
The Paris-based International Court of Arbitration found YPF responsible for rescinding on gas-export contracts in 2009 with AES Corp. (AES) Brazilian unit based in Uruguiana and Techint Group and Total SA (FP) unit TGM, YPF said in a note sent to the regulator after the close of trading May 24.
“The ruling is a black cloud on the company’s horizon and triggered the share price fall” said Carlos Aszpis, an equity strategist at Schweber & Cia. Sociedad de Bolsa SA.
Damages could be determined in a separate ruling by the same tribunal, the company said. In 2009, YPF was notified of claims by AES for damages totaling 1 billion dollars while TGM sought 17 million in damages and 366 million in lost profit, according to a YPF filing with the US Securities and Exchange Commission earlier this year.
Including past due interest, the amount would be 1.6 billion, Aszpis said.
The company, based in Buenos Aires, said it would analyze the arbitration ruling and energetically defend shareholders’ interests.
Spain’s Repsol SA is seeking 10.5 billion dollars in compensation from Argentina for the April 2012 nationalization of YPF. Under the previous management, YPF said it was the government not the company that was responsible for stopping gas deliveries.