| Operations Map |
Key dates
1992
Purchase of MetroGAS distribution licence
1994
MetroGAS Initial Public Offering on New York Stock Exchange
2002
Devaluation of Argentine Peso.
MetroGAS suspends payments of principal and interest on its debt
Southern Cross and Gas Link pipelines operational
2005
MetroGAS deconsolidation from BG Group’s accounts
Launch of MetroENERGIA gas marketing
2006
MetroGAS debt-restructuring completed
2008
Termination of MetroGAS holding company debtrestructuring agreement
MetroGAS
MetroGAS is the largest natural gas distribution company in South America. BG Group acts as technical operator.
MetroGAS supplies around two million customers in the city of Buenos Aires, and in 2007 delivered
7.9 bcm gas through over 16 000 kilometres of pipeline. The company distributes approximately 23% of the total natural gas supplied by the nine distribution companies in Argentina.
In January 2002, the Argentine government declared what it called a state of ‘public emergency’, forcing the re-negotiation of public utility contracts. The ‘Public Emergency Law’ has been extended up to
31 December 2008, thereby extending the renegotiation of the MetroGAS licence concession. The timing and outcome of this process still remains uncertain. As a result, in March 2002, MetroGAS and its holding company – GASA – suspended payments on all of its financial debt. In November 2003, MetroGAS launched a debt-restructuring plan.
In May 2006, MetroGAS reached a successful outcome of the debt-restructuring process, with a 95% level of consent from its creditors, increased to 99.5% by December 2006, following several court rulings.
In December 2005, GASA reached agreement with its creditors for a comprehensive restructuring, subject to regulatory and local competition authority approvals. The agreement would have reduced BG Group’s interest in GASA and led to the deconsolidation of MetroGAS from BG Group’s accounts in 2005. However, the local competition authority approval was not obtained and on 15 May 2008, GASA received a notification from its creditors Marathon Master Fund Ltd. and Marathon Special Opportunity Master Fund Ltd. informing that they wished to terminate the 2005 restructuring agreement. The creditors based their termination notice on the argument that closing was not achieved within the timeframe provided for in the restructuring agreement, resulting in the non-fulfilment of certain conditions precedent.
As a result, BG Group and its partners in GASA are currently evaluating the course of action that they will follow with respect to GASA’s debt.