Rarely as in the saga of the legal conflict around the expropriation of YPF which began as a matter of stock property ended up deriving in a technical discussion around the circumstances and consequences of a political decision, which today looks decontextualized. Perhaps the new crack on which argumentation is renamed in one way or another lies in the account that the judge of the District Court for the Southern New York area, Loretta Preska (Successor of the well -known judge Thomas Griesa) slid in its failure of June 30: to guarantee the payment of the US $ 16,100 million (More interest) previously set, ordered the delivery of 51% of YPF’s assets as a guarantee of a final agreement between the parties so many times delayed.
The origin. On May 3, 2012, the Law 26,471 by which it was declared “of national public interest the achievement of hydrocarbons self -supply ”and“ public utility and subject to expropriation 51% of the heritage of YPF SA and Repsol YPF Gas SA ”. Ovation in the vast majority of legislators who approved very quickly an operation that carried on the surface almost a month of crossfire, even with the approval of parties that were in the opposition (moderate) to the ruling Kirchnerism: radicals, provincial and socialist parties. The spokesman and defender of the decision of the operation return to the state level of what was then the largest company in the country, was the then Deputy Minister of Economy Axel Kicillof that even predicted that the expropriation not only would not cost a weight, but that Repsol You should pay for contingencies that should be reviewed. The result is already known, it was very different: the CEO of the Spanish oil company, the Catalan Antoni Brufau He managed to unlock the previous issue of US $ 5,000 million. Bad news if they are considered the US $ 14,000 million that had paid for 98% of the company in 1999 but not bad if because of the political harassment they were subjected since 2005, at least, they had been able to collect juicy dividends since the landing of the Eskenazi group (2008) that was done twice to 25% of the package. To finance that operation, Repsol agreed to establish a dividend policy that It came to distribute up to 140% of the total, when the average in the industry is between 30% and 60% of net profits.
With the signature of the initial transfer certificate, Brufau passed the helm of the command to the buyer group to which he described in his posthumous note as “Experts in regulated markets”. A phrase full of irony and the result of its many flight hours at the head of a company with a high profile and a lot of political interference in Spain of protected capitalism.
The conflict. The expropriation itself is not judicible, if it is made by law and contemplates compensation for the former owners. But in this case, a standard included in the statutes of the company reformed in 1993 appeared to pave the income of capital. Wall Street sharks call them “Poison Pills” (poisoned pills): Provisions that hinder the deployment of the free will of buyers or vendors and that defend interests of those who promote their inclusion. In this case, article 7 of the YPF Statute clearly mentions that any offer that exceeds 15% of the share capital must be made to the rest of the holders, notwithstanding that they could reject it. That was the step that, suggestively, omitted the government to avoid “stepping on the bear trap” as Kicillof described in several media crosses. And precisely, that argument was the one that founded the judge to raise the hand to the plaintiffs and demand compensation (which is considered inflated by dates and amounts taken for the calculation) to reach the final number.
Sebastián MarilRegional Director of Latam Advisorswhich monitors the judicial labyrinth of the case from the beginning, warns that before the operation the operation must be contemplated the reply of the beneficiaries of the ruling to the Government’s decision to resort to the Court of Alzada and with those elements present will say if Argentina can appeal with the benefit of the suspension of the embargo. “We do not know how it will come out, but before Julio ends this administrative issue prior to the appeal will be resolved”he explains.
The vulture. While the government flatly announced that “it will not negotiate” and that the judge’s ruling is impossible compliance (it would need a law with a aggravated majority to do so and, in addition, 25% is of the producing provinces), the conversations will not wait for the last deadline to do so. After all, both parties have something in common: Argentina shows their good behavior in the markets (perhaps an over -acting to mitigate their bad previous image) and the “beneficiaries” they claimed, what they want is to go out once and for all of a conflict that exceeds the average of the duration of the judgments in which they act. It is enough to remember that they paid US $ 17 million for inherent rights and even in the worst of the negotiations they could obtain this amount 200 times and the “YPF case” is valued at US $ 2.1 billion in its balance as 12/31/24. The price of Burford’s action, is still “cheap” without considering the eventual collection of something of those claimed in the trial, which would become an additional prize for those who bet on that role. The risk? That is never charged or dilates so much that interest decays.
Burford Capital is not a traditional background but one that finances judicial efforts. ANDS Say, in their assets are hundreds of cases whose rights were bought totally or partially to creditors who have no interest in litigating until the last circumstances. It is anchored in the stock market and its main shareholders (outside the atomized holders) are other coverage funds, pension funds and individuals.
“Depending on what finally comes to the general appeal that Argentina presented in October 2023, the negotiation will begin to see the payment method, which I understand will not be the US $ 16,100 million orders but with a discount through a structuring of a debt that is absorbed by the market”Maril concludes. The numbers are so great that they give so that they go with a considerable slice.
