Argentinan Government Seeking to Seize Stake in YPF SA; Stock Down 11%

In a bold move on Monday, Argentina's President Cristina Kirchner said that she will ask Congress to approve the expropriation of a controlling stake in YPF SA, the country's largest oil and gas producer. Shares were halted on the Buenos Aires Stock Exchange, and the ADRs, which trade on the New York Stock Exchange, fell 11.16% to $19.50. The statement was broadcast on national TV, as the Argentinian government is considering legislation which would allow it to take a 51% stake in the energy company. The move is designed to ensure Argentina's energy supply according to Kirchner. She blamed underinvestment on the part of private-sector energy companies for Argentina's declining oil and gas production which has forced the country to become a net importer of energy. Compensation for the stake will be determined by a special tribunal. Spanish energy giant Repsol YPF owns 57.4% of the company and the Eskenazi family of Argentina owns 25.5% of YPF. The reset of the company is traded on both the New York Stock Exchange and the Buenos Aires Stock Exchange.