Repsol-YPF launches exchange offers

Repsol-YPF SA, Madrid, said it plans to offer to acquire the shares of affiliates Astra, YPF, and Repsol Comercial it doesn't already hold.

It already owns stakes in all three companies, 67.9%, 97.8%, and 99.2% respectively. Repsol says it will propose a maximum capital increase of 40,636,629 shares�or 3.4% of Repsol YPF capital equity comprising 1.2 billion shares�at its general common shareholders meeting June 28.

It plans to offer four Repsol shares for every three Astra shares to shareholders in Argentina and Switzerland; two Repsol shares for every YPF share in Argentina and the US; and 12 Repsol shares for every 20 Repsol Comercial shares to shareholders in Spain.

Following the acquisition of YPF in June 1999, Repsol said it planned to integrate the assets and business management of Astra and YPF in Argentina, as part of its agreement with the Argentinian government. In addition, the divestment requirements accepted by Repsol YPF in Argentina, set for completion by the end of 2000, will change Astra from an integrated to upstream-focused company.

Repsol-YPF has been under heavy pressure from the Argentine government to shed downstream assets in order to allow more competition in the aviation, diesel, and gasoline markets. Repsol-YPF has a market share of about 50% and thus has taken much of the heat over the spike in fuels prices stemming from the runup in crude oil prices.

Because of this restructuring, Repsol says, it considers offering Astra shareholders the chance to swap their shares necessary. Repsol also wants to offer YPF shareholders who didn't subscribe to the exchange offer in June 1999 a second chance to sell their shares.