Spain’s Repsol has confirmed it is considering selling its remaining 12 percent stake in Argentine energy group YPF.<br /><br />That comes after Repsol reached a $5 billion (3.6 billion euro) settlement with the government of Argentina over the seizure of the company’s operations in the country.<br /><br />It is half of what Repsol initially demanded, but ends a dispute that has dragged on for two years. Under the terms of the settlement, Repsol will drop all lawsuits against Argentina and waive any future legal claims.<br /><br />Chairman Antonio Brufau said proceeds from the YPF settlement, the sale of liquid natural gas assets and the possible sale of its YPF stake would allow the company “to continue a sustainable path of growth in the upstream business.”<br /><br />Speaking about the settlement YPF President Miguel Galuccio, praised it as a crucial step for Argentina’s economy. “YPF is a fundamental tool for the country’s energy future and I believe the expropriation has given that tool back to Argentines.”<br /><br />Under the agreement, Repsol will receive a package of three dollar-denominated Argentine sovereign bonds with a nominal value of $5 billion. It will also receive additional bonds for a maximum face value of up to $1 billion to compensate for the market discount on the first group of bonds.<br /><br />Argentine sovereign bonds mostly trade at a steep discount since the country defaulted on international debt in 2002.<br /><br />The total market value of the combined packages will be at least $4.67 billion, which could be supplemented by $500 million in back interest payments on one of the bonds, known as the Discount 33.<br /><br />Repsol can sell the bonds whenever it wants though the final amount it receives for the bonds cannot exceed $5 billion after expenses and interest.<br /><br />The deal still requires approval from Repsol’s shareholders and the Argentine Congress.
