Argentina is contesting a US judge’s directive to relinquish 51% of shares in YPF in the expropriation matter; Milei is directing blame towards Kicillof and Fernández de Kirchner as concerns regarding the implications of the ruling intensify.
Argentina has officially requested that US Judge Loretta Preska pause the decision mandating the transfer of 51 percent of the shares in the state-owned oil company YPF to resolve a debt totaling US$16.1 billion.
Should the request for suspension be denied, Argentina will seek recourse in a higher court. The filing contends that adherence to Preska’s order would result in “irreparable harm” to the oil company. Argentina contended that the case involves “extraordinary circumstances” and is not merely a “simple commercial dispute between companies.” “This dispute affects Argentina’s sovereignty” because it concerns the country’s “strategic assets,” the filing states. It is evident that “the plaintiffs would not be harmed by a suspension that would only maintain the status quo pending review” of the appeal. It further elucidates that Argentina “cannot sell its shares in YPF without the intervention of Congress” for approval.
Milei’s administration pledged to contest Preska’s initial ruling that mandates Argentina to surrender over half of the shares in the state energy company YPF – marking the latest setback for Buenos Aires in a protracted international legal dispute spanning a decade. The nation is required to transfer 51 percent of YPF’s shares as a partial settlement of a US$16.1-billion debt owed to two companies impacted by the contentious nationalisation of the oil firm in 2012. Milei swiftly committed to an appeal, attributing the court controversy to the principal opposition Peronist movement.
The situation centers on the 2012 renationalisation of YPF, which was previously under the control of the Spanish energy company Repsol. This action took place during the second term of former president Cristina Fernández de Kirchner, spanning from 2007 to 2015.
In 2015, two minority shareholders, Petersen Energía and Eton Park Capital, initiated legal proceedings claiming damages due to the alleged inadequacy of compensation received during the takeover. Judge Preska ruled in favor of the plaintiffs and, in September 2023, mandated Argentina to disburse over US$16 billion to the firms.
To address the outstanding amount, she on Monday mandated Argentina to transfer “51 percent of YPF Class D shares” to an intermediary. Argentina’s government has a period of 14 days to transfer the shareholding package to a global custody account at the Bank of New York Mellon, as stated by Preska. Following this period, ownership will be transferred to the beneficiaries of the judgment or their designated representatives.