May 26, 2013
YPF sued in US
YPF, the Argentine energy company seized by the national government last year, is being sued in the United States on behalf of investors who allegedly were not warned of the risks of nationalization before a March 2011 securities offering.
In a complaint filed on Tuesday in the US district court in Manhattan, a Michigan pension fund said YPF and its underwriters made false statements and omitted key facts from a prospectus and other documents for the company’s roughly US$1.07 billion offering of about 26.2 million American depositary shares.
The Michigan fund, Monroe County Employees’ Retirement System, said YPF harmed shareholders by failing to disclose that it faced a heightened risk of nationalization at the time.
It said this should have been disclosed because of YPF’s failure to “adequately” produce oil and gas in Argentina, failure to reinvest enough profit into operations and breach of contracts with various Argentine provinces.
Last April 16, Argentine President Cristina Fernández de Kirchner announced the seizure of a 51 percent YPF stake from Repsol, saying that the oil and gas company did not invest enough and had let oil production and exploration decline.
The complaint said the price of YPF’s ADSs closed two days later at US$13.12, or 68 percent below their US$41 offering price.
It seeks class-action status on behalf of the ADS purchasers, money damages and other remedies.