Argentina’s government says it has no plans to sell the stakes in local companies it inherited when it nationalized private-sector pension funds in late 2008, as it would damage the interests of both the state and the companies.
The Administración…
Argentina’s government says it has no plans to sell the stakes in local companies it inherited when it nationalized private-sector pension funds in late 2008, as it would damage the interests of both the state and the companies.
The Administración Nacional de la Seguridad Social (ANSES), the Argentine state’s social security agency, which now manages the bought-out private sector pension funds took over some US$23.5 bn in assets, including shares, from about 10 private-sector pension funds. Small stakes owned by each of the funds in some of the largest Argentine companies were merged under single ownership, giving the government significant clout.
Now ANSES, through its Fondo de Garantia de Sustentabilidad, owns about 25% of Telecom Argentina. The other major shareholder is Nortel Inversora, which owns approximately 54%. Inversora is a consortium of the Argentinean family office, Werthein Group; Telecom Italia and Telecom France. The employees of Telecom Argentina own about 4% through ESOS.
Politically there are calls to sell the state-owned shares in Telecom Argentina, as well as a number of other major Argentinean firms including Banco Marco, Pampa Energia and Petrobras Energia to pay for higher payouts to pensioners and to assist in deficit reduction measures.
However the Minister for the Economy, Amado Boudou has resisted these calls saying: “We haven’t done this [sell any shares], nor are we going to do this. This provides peace of mind for directors and workers, and safeguards the Argentine economy.”
One of Telecom Argentina’s main owners, Telecom Italia, which has a 50% stake in Nortel Inversora, has been involved in a long antitrust battle with the Argentine state. The government wants Telecom Italia to sell its stake because the Italian company is partly owned by Spain’s Telefonica, which owns the other main Argentine telephone company, Telefonica Argentina, creating what authorities consider a monopoly in the local market.
ANSES has been an active investor since it assumed control of the shares it inherited from the private pensions funds. It has a strong corporate governance stance and has used its voting rights to try and engage with company owners.
Telecom Argentina recently filed a report to the US SEC claiming the “nationalization of Argentina’s pension and retirement system constitutes a significant change in the government’s approach to exercising influence over Argentina’s main publicly traded companies.” In many cases the companies have opposed ANSES and reached a compromise separately.
The filing concluded: “On average, approximately 20% of the share ownership and a significant portion of the public float was owned by the [private pension funds] and are now held by ANSES,” It continued: “There is an absence of clearly established policies,” and the criteria for electing ANSES representatives to boards of directors “is still unknown, as are its mandates.”
