Bloomberg News

Rajoy Says Other Spanish Companies Won’t Face Expropriation

April 17, 2012

Spanish Prime Minister Mariano Rajoy said he doesn’t expect Argentina to seize any other Spanish companies, after the South American country announced it will take a controlling stake in YPF SA (YPFD) yesterday.

Speaking on the sidelines of the World Economic Forum on Latin America in Puerto Vallarta, Mexico, Rajoy said he thought the seizure of YPF would be an isolated event. Madrid-based Repsol valued its 57.4 percent stake in YPF at 4.1 billion euros ($5.4 billion) at the end of 2011, the company said in a regulatory statement yesterday.

Argentine President Cristina Fernandez de Kirchner announced the expropriation of 51 percent of YPF yesterday. She justified the takeover by blaming Repsol for insufficient investment in new oil production that’s forcing the nation to import more energy.

Spain’s Industry Minister Jose Manuel Soria today pledged retaliation against Argentina. “The consequences will be in the areas of diplomacy, trade, industry and energy,” Soria said in an interview on state radio stations RNE. He declined to be more specific.

Asked if Spanish actions could trigger more takeovers by the Argentine state, Rajoy replied “no.”

Fernandez yesterday criticized the investment levels of foreign companies that operate in the telecom and banking industries, Diario Critico reported.

Telefonica SA and Banco Bilbao Vizcaya Argentaria SA are among the Spanish companies with units in South America’s second-largest economy.

“What yesterday happened to a Spanish company, somebody might think it could happen tomorrow to any other investment,” Rajoy said in a speech earlier today. “It’s a serious precedent.”

To contact the reporter on this story: Carlos Manuel Rodriguez in Mexico City at carlosmr@bloomberg.net.

To contact the editor responsible for this story: Jonathan Roeder at jroeder@bloomberg.net.


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