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To: Glenn Petersen who wrote (167256)	4/17/2012 1:10:48 AM
From: elmatador	Respond to of 206098

Crisis bite in Spain, it milks foreign investments: Spanish investment in Latin America ranks second only to that of the United States. For a time, this investment brought large returns, especially during the lucrative privatization of utilities, telecommunications companies, and banks in the 1990s. But the onset of a regional economic downturn in 2001 meant massive losses for investors. In the year after the Argentine economic crisis, the worth of the 11 Spanish companies with the biggest operations in Argentina fell by 83 percent. In this excellent book, Chislett provides a detailed and well-documented account of Spanish investors' infatuation and subsequent disillusionment with Latin America. Spanish banks, he argues, have come to believe that they concentrated too much attention on Latin America, to the detriment of domestic markets. Spanish investors on the whole are now looking at the region much more skeptically -- having discovered, as their ancestors did, that El Dorado is not all it was cracked up to be. Latin America: Challenges and Opportunities William Chislett Reviewed by By Kenneth Maxwell January/February 2004 If Spain milks its foreign investments in LATAM, it will have more conflicts in the future. Message 28086193

To: Glenn Petersen who wrote (167256)	4/17/2012 9:44:41 AM
From: Dennis Roth	Read Replies (2) \| Respond to of 206098

YPF Sociedad Anonima (YPF) (All) shareholders expropriated Where now? After yesterday’s announcement that Argentine President Ms Cristina Kirchner submitted to the Senate a proposal to expropriate 51% of YPF’s capital (all to come from Repsol), we think the main question to be asked from a YPF minority shareholder point of view is whether the ‘new’ YPF will be able to create fundamental value, and the implications of the interests of the ‘new’ stakeholders. By taking a detailed look at the proposed new regulation, we find it difficult to argue for clear intrinsic value creation. We therefore downgrade to Underperform. Our new target price of $11/ADR (from $30/ADR) is an average of three worst case scenarios that could arise. We provide detail and thoughts on the proposed new legislation in this note. From whom, to whom and how much? If the expropriation goes ahead, YPF share capital will be approximately 51% government (of which 51% national government and 49% provinces), 26% the Petersen group (unchanged), 17% free-float (unchanged), and 6% Repsol (down from 57%). The price of the expropriation is to be set by the National Appraisal Tribunal, in accordance to law 21499 of 1977. This law, on its turn, mentions indemnity will only comprehend the ‘objective’ value of the assets. Repsol has officially declared it considers the announced measures to be unlawful and gravely discriminatory, and that it will carry all pertinent legal actions. Value for stakeholders vs minority shareholders. Taking a detailed look into the proposed legislation, we find it difficult to argue for clear intrinsic value creation. Sentences like ‘Maximization of investments and capital employed with the aim to provide hydrocarbon self-sufficiency’ and ‘Protection of the interests of the consumer with regards to price...’ will likely bring into question the issues of whether capital will be deployed profitably, and whether downstream prices continue to increase. Overall, investment climate is likely to deteriorate in Argentina, impairing other companies confidence into deploying capital in the country. This could also have a direct impact on YPF when it comes to farm- outs and securing oil services capacity to develop shale resources. === 12 pages, 3 exhibits Download on page: sendspace.com