Telecom Argentina CEO Downplays Nationalization Fears
May 04 2012 - 12:47PM
Dow Jones News
Telecom Argentina SA's (TEO, TECO2.BA) chief executive said
Friday that he doesn't expect the telecommunications firm will be
nationalized like oil company YPF SA (YPF, YPFD.BA).
"We are quite happy to operate here. We haven't had any
indication [from the government], and honestly don't expect any
surprises in that respect," Chief Executive Franco Bertone said
during a conference call with analysts.
On Thursday, Congress gave President Cristina Kirchner the
greenlight to seize a 51% stake in YPF from Spain's Repsol YPF SA
(REPYY, REP.MC) just three weeks after she submitted the
expropriation bill.
Kirchner says the takeover is necessary because Repsol didn't
invest enough in YPF to reverse years of declining oil and gas
production that have turned Argentina into a net energy importer.
Repsol has denied the charges and said it will fight the takeover
in the courts.
Kirchner's swift nationalization of the country's largest
corporation has fueled speculation that other former state-run
companies that were privatized in the 1990s might soon return to
government hands.
Telecom Argentina and rival Telefonica de Argentina, a
subsidiary of Spain's Telefonica SA (TEF), were created when
state-run phone giant Entel was broken up and privatized.
The government is already a major shareholder in more than two
dozen local corporations after Kirchner nationalized the private
pension system in 2008.
Pension agency Anses owns 25% of Telecom Argentina alone. The
company's other direct and indirect shareholders include Telecom
Italia SpA (TI, TIT.MI), Telefonica, and Argentina's Werthein
family.
Telecom Argentina's shares traded in New York were recently down
0.6% at $13.92 Friday, giving the company a market capitalization
of about $2.7 billion.
Asked if management would consider a share buyback program to
address the stock's rock bottom valuation, Bertone said no plans
are on the table.
"We agree with your view on that metric of the company," he
added.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740,
ken.parks@dowjones.com