A United States court has ordered Argentina to hand over 51 percent of YPF shares to the beneficiaries of the ruling against the company’s 2012 expropriation by then-president Cristina Fernández de Kirchner.
In this trial Argentina has already been sentenced to pay US$16.1 billion – but how did we arrive at this point?
The antecedents of a ruinous case for this country
In 2008, YPF was in the hands of the Spanish oil company Repsol, when Petersen Energía – a firm established in Spain – received a loan of US$1.018 billion from a group of banks formed by Crédit Suisse, Goldman Sachs, BNP Paribas and Banco Itaú Europa with a further US$1.015 billion from Repsol to acquire 14.9 percent of YPF.
To pay it off, Repsol permitted them to use the oil company’s own dividends.
In 2011, the Eskenazi family – the owners of Petersen – borrowed US$670 million more from a consortium formed by Banco Itaú, Standard Bank, Credit Suisse and Citibank, and an equal sum from Repsol to acquire a further 10 percent of the oil company.
These loans were to be repaid with YPF dividends in all cases. When Fernández de Kirchner nationalised the company, the banks declared the repayment of the loans to be “in default.”
The Eskenazis had already paid almost the entirety of the first credit and part of the second. Nevertheless, due to the format of the contract, the totality of their shareholdings would be due to the banks.
Petersen Energía therefore requested their bankruptcy in Spain, which is when the Burford fund appeared on the scene, buying up their litigation rights for 15 million euros.
This was accepted by the Spanish liquidator of the bankruptcy in exchange for reserving 30 percent of Burford’s receipts in compensation.
An old rumour, never confirmed, started circulating in business and political circles that the Eskenazi family, as owners of Petersen Energía, could receive money from that compensation but company spokespersons firmly denied it.
Grupo Petersen’s position
As explained by Grupo Petersen to a correspondent of Noticias Argentinas news agency, they entered YPF as shareholders through an operation between private partners responding to market parameters and counting on the financial support of top-level international banks.
This operation was agreed with Repsol SA, then the majority shareholders of YPF SA, and included the acquisition by Grupo Petersen of 25 percent of YPF SA’s social capital in two instalments, the first 14.9 percent subsequently expanded with the purchase of an additional 10.1 percent.
The totality of the operation met all the regulatory requisites of transparency set by the control commissions of Argentina (CNV), Spain (CNMV) and the United States (SEC), all contained in public information available for consultation.
The financial engineering for the entry of Grupo Petersen into YPF demanded over a year of negotiations with the first stage a loan of US$1.018 billion from a pool of banks formed by Crédit Suisse, Goldman Sachs, BNP Paribas and Banco Itaú Europa,with a further US$1.015 billion from Repsol via a “vendor’s loan,” standard practice in operations of this magnitude.
For the second stage (in 2011) a credit of US$670 million was borrowed from a consortium formed by Banco Itaú, Standard Bank, Crédit Suisse, Santander and Citibank, and an equal sum from Repsol.
Any information referring to the use of “Santa Cruz funds” and their presumed relationship with the entry of Grupo Petersen into YPF as a shareholder is absolutely fallacious and lacking any grounds, according to the group.
The trial
Grupo Petersen entered YPF via two societies created and based in Spain (a condition established by the lenders): Petersen Energía and Petersen Energía Inversora.
Posterior to the nationalisation of YPF SA, Petersen Energía SA and Petersen Energía Inversora SA proceeded to shed the totality of their shares in that company in guarantee of the loans received for their acquisition, thus not possessing from that moment any shareholding in YPF SA.
The two Petersen societies declared bankruptcy and went into a process of liquidation in a Spanish commercial court (Juzgado Mercantil Nº 3), which appointed a trustee in bankruptcy.
The latter has argued that when expropriating Repsol’s 51 percent in YPF, the Argentine state should have launched a takeover bid for 100 percent of the company, according to YPF statutes, which failed to happen. The trustee thus argues that the two Petersen societies should have received an offer for their 25 percent, something which also failed to happen, thus having the right to litigate against the Argentine state as seeing themselves adversely affected economically.
The Grupo Petersen expressly renounced that right to litigate against the Argentine state. They neither went to trial nor sold their rights to Burford, remaining totally outside the lawsuit.
It was the Spanish court administering the bankruptcy which auctioned those rights to litigate, which were acquired by Burford (the same fund winning the trial against Argentina for the expropriation of Aerolíneas Argentinas).
Burford thus purchased the bankruptcy from a Spanish court and with it the rights to litigate against Argentina, presenting its lawsuit in the courtrooms of New York (which accepted the claim because YPF shares are quoted on Wall Street) in 2015.
On April 9, 2015, upon learning the news of the lawsuit presented by Burford the previous day and in light of the erroneous information which began to circulate in some media, the Grupo Petersen issued a press communiqué explaining that it was totally alien with no intervention of any kind in any court trial linked to YPF.
– TIMES/NA
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