FACTBOX-Venezuela’s state takeovers under Chavez

Oct 14 (BestGrowthStock) – Venezuelan President Hugo Chavez has
ordered a series of new nationalizations, mostly affecting
agricultural companies. [ID:nN14157700]

The moves come after the opposition made gains in
parliamentary elections last month that gave them 40 percent of
National Assembly seats and nearly half the popular vote.

Chavez has said opposition gains pose no obstacle to his
legislative agenda and has vowed to accelerate his socialist
“revolution.”

Following are some key events in his 12-year push to
increase the state’s hand in the economy through takeovers,
regulation and taxes:

AGRICULTURE:

* This month, his government announced the nationalization
of one of the world’s biggest producers of nitrogen fertilizer,
Fertinitro, as well as the takeover of Agroislena, a major
local agricultural supply company. It also said it would take
control of nearly 200,000 hectares (494,000 acres) of land
owned by British meat company Vestey Foods. [ID:nN10265797]

* In 2005, Chavez began implementing a 2001 law letting the
state expropriate unproductive farms or seize land without
proper titles. He has redistributed millions of acres deemed
idle in a bid to boost food production and ease rural poverty.

* Vestey Group had already filed for arbitration over the
earlier takeover of a ranch. Chavez said the latest deal with
Vestey was a “friendly agreement.”

* The government agreed to pay more than $3 million to a
group of Spanish farmers for their land.

FINANCE:

* In June 2010, Venezuela took over the mid-sized Banco
Federal, citing liquidity problems and risk of fraud. The bank
was closely linked to anti-government TV station Globovision.

* In 2009, Chavez paid $1 billion for Banco de Venezuela, a
division of Spanish bank Grupo Santander (SAN.MC: ).

* His government has closed a dozen small banks since last
November for what it said were operational irregularities. Some
were reopened as state-run firms. Brokerages have also been
closed. Chavez vows to nationalize any bank that fails to meet
government lending guidelines or is in financial trouble.

OIL:

* In 2007 the government took a majority stake in four
heavy crude projects worth tens of billions of dollars in the
vast Orinoco oil belt. U.S. companies Exxon Mobil Corp (XOM.N: )
and ConocoPhillips (COP.N: ) quit the country over the move and
filed arbitration claims with the World Bank’s International
Center for Settlements of Investment Disputes, ICSID.

* France’s Total SA (TOTF.PA: ) and Norway’s StatoilHydro
(STL.OL: ) received around $1 billion in compensation after
reducing their holdings. BP Plc (BP.L: ) (BP.N: ) and Chevron Corp
(CVX.N: ) remained as minority partners.

* Last year, Chavez seized a major gas injection project
belonging to Williams Cos Inc (WMB.N: ) and a range of assets
from local service companies.

* In June 2010, the Venezuelan authorities nationalized 11
oil rigs owned by U.S. firm Helmerich and Payne (HP.N: ).

HEAVY INDUSTRY:

* The government paid $2 billion in 2009 for Argentine-led
Ternium SA’s (TX.N: ) stake in Venezuela’s largest steel mill.

* Chavez ordered the nationalization of the cement industry
in 2008, affecting Mexico’s Cemex (CX.N: ), Switzerland’s Holcim
(HOLN.VX: ) and France’s Lafarge SA (LAFP.PA: ). Holcim and Cemex
both filed for arbitration with ICSID.

* Chavez has also considered bringing mining more firmly
into state hands, and last November the mining ministry seized
Gold Reserve Inc’s (GRZ.TO: ) (GRZ.A: ) Brisas project, which sits
on one of Latin America’s largest gold veins. Gold Reserve
immediately filed for arbitration with ICSID.

TELECOMMUNICATIONS:

* In 2007, Chavez nationalized the country’s largest
telecommunications company, CANTV, buying out U.S.-based
Verizon Communications Inc’s (VZ.N: ) 28.5 percent stake for $572
million. Analysts said Verizon’s compensation was fair.

POWER:

* In the same year, Venezuela expropriated U.S.-based AES
Corp’s (AES.N: ) stake in Electricidad de Caracas, the country’s
largest private power producer. It paid AES $740 million for
its 82 percent stake. Analysts said the deal was fair for AES.
(Reporting by Caracas Newsroom; Editing by Eric Beech)

FACTBOX-Venezuela’s state takeovers under Chavez