Billionaire family's oil stake is nationalised

By Jonathan Gilbert, May 3, 2012
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A billionaire Jewish family in Argentina is in crisis after the country's biggest oil company was nationalised by the government yesterday.

The Eskenazi family owned 25 per cent of YPF, whose majority stakeholder was Repsol, the Spanish energy giant, before the Argentine Congress passed a bill confirming the expropriation of 51 per cent of its shares on Thursday.

Enrique Eskenazi, 86, accumulated his fortune in banking and construction before buying 15 per cent of YPF from Repsol in 2008 through the family's Petersen Group. He bought a further 10 per cent in 2011.

His third son Sebasti√°n, 48, was executive president of YPF until he and other directors - including two of his brothers - were thrown out of the company's Buenos Aires headquarters by government ministers during a speech two weeks ago by Cristina Kirchner, the Argentine president, announcing the expropriation.

And the family, one of the most powerful in Argentina, is now facing a conundrum since it did not pay for its 25 per cent stake in YPF, but acquired the shares with a seller's note from Repsol and bank loans.

They had agreed to pay back the money, which amounts to around £1.2 billion, using dividends from YPF, but the Argentine government now wants to reinvest the company's earnings in production.

The Eskenazis may have to sell their shares in order to repay their creditors, but YPF's share price has dropped 60 per cent this year.

A saving grace would be a 2008 agreement that obliges Repsol to buy back the family's shares if it were to lose majority control, but the Spanish company is set to argue that the expropriation was unforeseeable and thus it does not need to pay.

Referring to the Eskenazi family's predicament, Antonio Brufau, president of Repsol, said: "He who isn't expropriated is more nailed than he who is expropriated."

Last updated: 4:32pm, October 16 2012