Argentina’s President Cristina Kirchner has proposed the nationalization of the country’s oil resources in a move that will cost Spain’s Respol YPF SA (OTC: REPYY) most of it’s 57% stake in YPF, the once publicly-traded Argentine oil company in which Repsol bought a controlling stake in 1999. Kirchner’s move requires approval by the country’s legislature, a slam-dunk given that her party controls the government.
Repsol, and the government of Spain, of course object to the expropriation of Repsol’s stake in YPF. Kirchner has said that a federal tribunal will set the compensation price for current shareholders. Repsol’s stake in YPF was worth about $6 billion before the Kirchner’s announcement.
Repsol YPF’s shares lost -4% yesterday, to close at $21.87 in a 52-week range of $21.07-$36.35. The yearly low was set yesterday, and today could see another new bottom.