Post date: Apr 17, 2012 11:25:53 AM
MADRID, SPAIN (APRIL 17, 2012) (REUTERS) - The CEO of Spanish oil giant Repsol announced legal action against Argentina on Tuesday (April 17) as a response to the Latin American country's decision to seize the company's shares in Argentina's leading energy company YPF. An action seen by some Spaniards as hostility act against their country.
Repsol's CEO announces legal action against Argentina as Madrid residents and markets react to President Kirchner's decision to to seize the Spanish oil giant's shares in YPF.
Antonio Brufau, CEO of Repsol, qualified Argentina's take-over as an "illegitimate and unjustifiable decision from the judicial point of view."
Brufau said that Repsol would initiate legal actions against the take-over.
"With this action, the Argentine government underestimates the rights and the interest of YPF's shareholders, violating once again the principle of legal safety and the investor's confidence," he said at a two-hour news conference in Madrid.
"As a response to all these grievances, Repsol will initiate all necessary legal actions and other investors might do the same," he added.
Brufau also said the company would base compensation claims against Argentina for the take-over on a minimum value of the YPF of $18 billion.
Argentine President Cristina Kirchner unveiled plans on Monday to seize control of YPF, drawing swift warnings from key trade partners and risking the country's further economic isolation.
YPF, controlled by Repsol, has been under intense pressure from Fernandez's centre-left government to boost production, and its share price has plunged due to months of speculation about a state take-over.
Argentina's decision was reflected in all front pages of Spanish dailies.
Conservative-leaning ABC carried a photograph of President Kirchner on its front page with the headline: "Plunder".
Leading Spanish daily El Pais said: "Argentina expropriates YPF from Repsol".
Some Madrid residents filling their vehicle tanks at a Repsol gas station on Tuesday, expressed their dissatisfaction with the announcement.
"Awful. I think that it is awful. It is populist and a shamelessness after all that Spain has helped Argentina. It is a situation... I hope the government take measures and does something, something serious. This is enough teasing," said Madrid resident Domi.
"There is no legal security, they are not fulfilling the compromises that they agreed 30 years ago or 20 or what ever years they are, 14. And now they just simply expropriate it and take control of it. We will see what happens, how much are they going to pay, what are they going to do," Luis Molina, a delivery truck driver, told Reuters.
At 1200 local (1000GMT) on Tuesday, Madrid's stock exchange showed Repsol's shares going 6.5% down as Argentina's ambassador to Spain was expected to meet Spanish Foreign Minister Jose Manuel Garcia-Margallo at 1230 local (1030GMT).