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9 Sep, 2023 11:56

US court orders Argentina to pay $16 billion over oil firm takeover

The ruling wraps up a years-long legal battle waged by former YPF investors backed by the world’s largest litigation finance provider
US court orders Argentina to pay $16 billion over oil firm takeover

A US federal judge has entered a $16 billion judgment in favor of former shareholders of energy company YPF, who were backed by Burford Capital, in a case against the government of Argentina.   

The dispute, arising from the country’s takeover of a majority stake in the oil and gas company in 2012, ended in defeat for the Argentine government, which has been ordered to pay $8.4 billion in damages and $7.6 billion in interest to two defunct investors in YPF, Petersen and Eton Park.     

Shares in Burford Capital, a litigation finance powerhouse that largely funded the plaintiffs’ claims, soared 28% in US trading shortly after the decision was published on Friday.   

The Argentine government called the ruling “unprecedented and erroneous” in a statement, adding that it would appeal.   

“This case over the rights of former shareholders of an Argentine company under the Argentine company’s bylaws does not belong in a US court,” the statement reads. 

Buenos Aires seized control of 51% of YPF in 2012 after accusing its majority shareholder, Spanish company Repsol SA, of failing to invest sufficient resources in oil production. In 2014, the parties reached an agreement under which the Spanish firm received compensation of $5 billion.   

Burford Capital later purchased the defunct companies that owned 25% of YPF shares before the nationalization.   

“We will continue to defend energy sovereignty and our state company YPF against vulture funds,” Argentine government spokeswoman Gabriela Cerruti posted on X (formerly Twitter).

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