Distribuidora de Gas Cuyana

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Distribuidora de Gas Cuyana SA was one of the eight companies created in 1992 from the distribution facilities of Gas del Estado, an Argentinean state-owned company. Distribuidora de Gas Cuyana was partially privatized in December 1992, when a 60% equity stake was sold for $122 million to Sideco Americana (45%), and Sociedad Italiana Peril Gas SpA - Italgas (15%). The consortium paid US$26 million in cash and US$96 million in debt papers valued at their market value. The winning consortium also assumed liabilities for $8 million. Government retained a 30% equity stake to be sold later through public offerings, and the remaining 10% equity stake was separated to be sold to company's employees, at the same price per share paid by the consortium. The winning consortium was awarded with a 35-year concession period with the option to extend for an additional ten years, as long as service quality indicators and investment obligations stipulated in the contract were met. As of 2004, the sponsors included Sideo Americana (30 percent), Louisiana Gas and Energy (14 percent), Sociedad Italiana per il Gas (15 perent), and local investors (10 percent). During the period 1993-97, Distribuidora de Gas Cuyana invested $60.9 million of which $17.9 million was allocated to improve the security of its distribution facilities. The remaining $43 million were invested in expanding its distribution network and improving the quality of its services. In mid-2000, Sideco sold its shares in Distribuidora de Gas Cuyana to its partner in the project Italgas. In 1999, the provincial government of Mendoza sold the remaining 30% stake through an ininital public offering in the Argentine Stock Exchange for US$60.7 million Contract investment obligations indicated an investment sufficient to meet the required standards during the first five concession years. The standards were based on US standards but adjusted for conditions in Argentina. The conditions for the extension of concession periods were the same for all privatized gas distribution companies. In addition, the company invested US$ 16.1 million in 1998, US$ 13.8 million in 1999 and US$ 8 million in 2000.