Gasnor

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Distribuidora de Gas del Noroeste SA was one of the eight companies created in 1992 from the distribution assets of Gas del Estado, an Argentinean state-owned company. Distribuidora de Gas del Noroeste was privatized in December 1992 when a 90% equity stake was sold for $72 million to Construcciones Civiles (36%), Banco Frances del Rio de la Plata (18%), and Gas de Santiago (36%). The winning consortium paid in cash ($10 million) and in debt papers ($62 million) valued at their market value. The remaining 10% equity stake was retained to be sold to company employees, at the same price per share paid by the consortium. The winning consortium was awarded with a 35-year concession period and the option to extend for an additional ten years, as long as service quality indicators and investment obligations stipulated in the contract were met. Contract investment obligations indicated that the company should invest sufficiently to meet the required standards during the first five concession years. Those 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. During the period 1993-99, Distribuidora de Gas del Noroeste invested $84.4 million to improve the security of its distribution facilities, to expand its distribution network and to improve the quality of its services. In 2000, the company invested US$ 30 million.