Javier Milei, the newly elected President of Argentina, has announced his intention to privatize YPF, the country’s state-owned oil company. The news sent shares of YPF soaring on Wall Street by 41.3% in a day of widespread increases among Argentine companies. However, the process is not as simple as it may seem for Milei and his new ruling party.

Before privatizing the 51% of the share package held by the National State and producing provinces, Milei has promised to revalue its value to make it more attractive to potential buyers. However, experts warn that this is a complex operation that requires repealing the expropriation law from 2012, when YPF was controlled by Repsol.

To transfer shares to the private sector, Milei must first obtain authorization from Congress. While he mentions using DNU (Decree of Necessity and Urgency) as a possibility, any decision made must be approved by Parliament. This adds an extra layer of complexity to the process and potentially creates risks for potential buyers.

Once Congress has approved the transfer of shares, Milei must decide whether to sell the entire package to a single buyer or sell shares on the stock market. According to Rabinovich, anyone who holds more than 15% of YPF’s shares must make an offer for the entire company and agree with 49% of private shareholders before they can be sold on the market.

The privatization process will also face resistance from oil-producing provinces, which rely heavily on YPF’s revenue as a source of income. Additionally, there are legal issues surrounding compensation paid to Repsol for their previous control over YPF and last September’s court ruling ordering Argentina to pay $16 billion in damages for failing to launch a public offer when it took control of YPF in 2012.

Overall, Milei will have several obstacles to overcome before he can successfully privatize YPF and fulfill his campaign promises about revitalizing Argentina’s economy through privatization efforts.