The government will intervene Metrogas
The board of directors of the company Metrogas (METR) decided to request the formation of insolvency proceedings, given the lack of cash generation to meet its debt payments AND to pay their financial and commercial and tax obligations. This was due to the fact that it has not yet received the agreed rate increase. The company confirmed that the decision is purely operational and that it will maintain the quality of its services. The Government will intervene the company.
Metrogas (METR) had lost 15.1 M in the 1st Trimester of the 2010 ARS compared to the same period the previous year of 39.7 M. ARS In the last quarter of 2009 the company had obtained a loss of 40.1 M. ARS Revenues in the first quarter of this year were ARS 225.7 M, 12% higher than T09 1, but 5% higher than the previous quarter.
In short, Metrogas had to take this action for lack of funds to address its trade and tax debts. The company has been negatively affected by not receiving the rate increase agreed at the time. We believe that until we receive such increase in tariffs, the company could continue to have losses in the coming balances.