Bolivia moves closer to gaining control of foreign companies

The Bolivian government pushed ahead with its moves to re-nationalize its energy industry, ordering foreign financial companies to surrender control over shares they administer for a public pension fund.

Photo: Bolivia moves closer to gaining control of foreign companies

The Bolivian government on Monday gave Spanish Banco Bilbao Vizcaya Argentaria SA, or BBVA, and Futuro SA of Swiss Zurich Financial Services three days to hand over the assets they administer for a fund used to pay pensions.

The move would immediately give the government control over a large, but minority block of shares in three energy companies. The shares are worth an estimated US$1.5 billion ( Ђ 1.16 billion), according to Andres Soliz, Bolivia's hydrocarbons minister.

Vice President Alvaro Garcia Linera said attempts to negotiate with the financial institutions had been unsuccessful and the government was forced to issue a decree demanding the shares.

"Nobody is going to stop the nationalization, no external force, and much less any conservative internal force that has tried to block this," Garcia Linera said after signing the decree.

Garcia Linera was apparently referring to a company official who said last week that the law would not allow the government to take the shares without paying compensation.

The three local energy companies involved are Andina SA, a subsidiary of the Spanish-Argentine Repsol YPF; Chaco SA, a unit of Britain's BG Group PLC and BP PLC, and Transredes SA, of British-Dutch owned Shell Corp.

All three were once Bolivian state-run companies that 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 for the Bolivian people. The trust is used to pay a pension to all Bolivians over 65 years old.

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. To take majority control over the three companies, the government must still purchase shares from foreign shareholders, reports the AP.

I.L.