3. Traditional Valuation Methods

Market View

In April 2012, Cristina Fernández de Krichner, Argentina’s president, announced that the government was seizing control of 51 percent of YPF, the country’s largest hydrocarbon producer. The action would be executed by expropriating shares from Repsol, the Spanish oil and gas company, reducing its stake in YPF from 57.4 percent to 6.4 percent. The Argentinian president justified the nationalization by citing both Repsol’s underinvestment in YPF and YPF’s excessive dividend payments to Repsol.

YPF accounted for approximately 45 percent of Argentina’s hydrocarbon production and had generated $1.3 billion in net income in 2011. Argentina had spent $9.4 billion on fuel imports in 2011 and did not expect ...

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