BUENOS AIRES (Reuters) - Argentina’s government concluded its takeover of the country’s biggest energy company on Monday by naming new directors, although YPF’s former owner - Spain’s Repsol - managed to retain one seat on the board.
During the first shareholder meeting since President Cristina Fernandez seized control of YPF in April, 16 of the company’s 17 directors were appointed by the state. Repsol managed to nominate the remaining directorship.
Fernandez won strong domestic support for her expropriation of a 51-percent stake in the company from Repsol (REP.MC), which she accuses of failing to invest to boost production and oil and natural gas, forcing the country to turn to costly imports.
Repsol still owns 6 percent of YPF and now holds the voting rights on another 6 percent of the company that had been put up as guarantees from fellow YPF shareholder, Argentina’s Petersen Group.
The government-appointed directors include Deputy Economy Axel Kicillof - the young, leftist economist seen as the brainchild of the takeover, and YPF’s new general manager Miguel Galuccio.
The appointment of Galuccio, an engineer who led the integrated project management unit of Schlumberger (SLB.N), was read as a sign that Fernandez wants a state-controlled YPF to have a professional leadership.
Argentina’s main energy-producing provinces - Neuquen, Santa Cruz, Chubut and Mendoza - got one seat each on the board. Another six energy-producing provinces will have one rotating seat.
Repsol’s representatives said Monday’s meeting was invalid. The Spanish company, which considers the expropriation illegal and has started legal action against Argentina, is demanding compensation of $10 billion.
“(We proposed a director) to mitigate the damage to our interests and to defend our investment,” Repsol representative Pablo Blanco told the meeting.
An Argentine valuation panel that is part of the executive branch will decide what the government must pay but officials have already indicated they will pay much less than Repsol is demanding.
Some analysts think they may offer Repsol nothing, citing accusation of inadequate investment and environmental damages.
Reporting by Alejandro Lifschitz; Writing by Helen Popper; Editing by Tim Dobbyn