Repsol Board Oks Tentative Deal Struck With Argentina On YPF Compensation

(RTTNews) - The Board of Directors of Spanish oil company Repsol SA (REPYY) have on Wednesday "reviewed and views favorably" the tentative agreement announced on Monday by the Argentinian Government related to the compensation for the expropriation of 51 percent controlling stake it had in YPF SA (YPF) that was nationalized in 2012.

The heads of agreement that was reached on Monday was put to the consideration of Repsol's board of directors, which was to evaluate the terms and conditions at its meeting earlier in the day.

Repsol board of directors approved a multi-billion dollar compensation deal that called for the payment of a remuneration to its shareholders in the framework of the Repsol Flexible Dividend Program and in replacement of the interim dividend of 2013, equivalent to 0.50 euros gross per share under a scrip dividend scheme.

The board noted that it has decided to start talks between its teams and the Argentinian Government soon to find a "fair, effective and quick solution" to end the controversy. It also approved the engagement of an internationally renowned investment bank to support Repsol's team and to facilitate a professional management of the process.

The Argentina government is reportedly offering a compensation that totals $5 billion in dollar-dominated government bonds.

Repsol has been demanding $10.5 billion in compensation for the act that shocked Argentina's trade partners, especially in Europe. The South American country nationalized YPF, saying that Repsol did not invest enough in it.

The Spanish oil firm had in June rejected a $5 billion compensation offer from the Argentine government for the expropriation of Repsol's stake in YPF, stating it did not satisfy the losses suffered by the company.

The Argentine government expropriated 51 percent of YPF's stock from Repsol in May 2012, ignoring threats of strong retaliation by the Spanish government as well as the European Union.

The government's move to re-nationalize YPF, which provides about a third of the country's oil and a quarter of its gas requirements, came a year after YPF announced the discovery of large swathes of shale oil and gas fields.

Repsol later filed a legal complaint against Argentina at the World Bank's arbitration body in Washington. The tentative settlement is seen to end the 19-month old strained relations between Argentina and Spain.

Repsol shares closed Wednesday's regular trading in Madrid at 19.29 euros, up 0.05 euros or 0.26% on a volume of 8.07 million shares.

YPF closed on the NYSE at $29.95, up $0.58 or 1.97% on a volume of 2.03 million shares.