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THE NEW YORK TIMES: Cos. to Give Energy Shares to Bolivia

Cos. to Give Energy Shares to Bolivia

By THE ASSOCIATED PRESS
Published: May 17, 2006

Filed at 4:57 p.m. ET

LA PAZ, Bolivia (AP) — A Spanish bank and Swiss insurance company ended their standoff with the Bolivian government Wednesday, dropping demands for immediate compensation for handing over energy shares they administer for a public pension fund.

The Bolivian government on Monday gave Prevision and Futuro SA three days to hand over the shares in three companies as President Evo Morales' government reasserts control over the energy sector.

The move comes two weeks after Bolivia nationalized its natural gas industry and officials vowed to take control over all energy operations in the country.

The pension shares, which the government says are worth about $1.5 billion, would immediately give the government control over a large, but minority block of shares in three energy companies. It plans to obtain majority interest from the current foreign owners.

The fund administrators originally argued that the government could not legally take the shares without compensation, but changed their position Wednesday.

''There's no alternative'' but to comply, said Gonzalo Bedoya, president of Futuro, a unit of Spain's Banco Bilbao Vizcaya Argentaria SA, or BBVA.

He said Futuro would surrender the shares under protest and would reserve the right to take legal action.

Idelfonso Nunez, president of Prevision — part of Swiss Zurich Financial Services — took a more conciliatory tone.

''The only thing that interests us is clearing our responsibilities and that the state gets the shares in best conditions and I believe we'll have no problem,'' Nunez told Bolivian television station ATB.

The three local energy companies involved are Andina SA, a subsidiary of the Spanish-Argentine Repsol YPF; Chaco SA, a unit of Panamerican Energy controlled by Britain's BP PLC and Argentine Grupo Bridas, and Transredes SA, of British-Dutch owned Shell Corp. and American Prisma Energy.

The three former state companies were privatized in the 1990s. Foreign shareholders took majority control, while a little less than half the shares of each were put in a trust used to pay a pension to all Bolivians over 65 years old.

The administrators distribute the pension and represent shareholders.

The government insists it will continue to pay the pension, but said it will also use the funds to boost its cash-strapped state energy company.

The trust holds roughly 48 percent of Andina and Chaco and 34 percent of Transredes.

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