Chavez to nationalize electric, telecom companies
Last Updated: Monday, January 8, 2007 | 7:00 PM ET
The Associated Press
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Venezuelan President Hugo Chavez announced plans Monday to nationalize the country's electric and telecommunications companies.
"All of those sectors that, in an area so important and strategic for all of us as is electricity, all of that which was privatized, let it be nationalized," Chavez said in a televised speech after swearing in a new cabinet.
"C. A. Nacional Telefonos de Venezuela (CANTV), let it be nationalized," Chavez said. "The nation should recover its property of strategic sectors."
When Chavez was re-elected by a wide margin last month, he promised to make a more radical turn toward socialism. Monday's announcement appeared likely to affect Electricidad de Caracas, owned by AES Corp., and CANTV, the country's largest publicly traded company.
CANTV's American Depositary Receipts plunged 14.2 per cent to $16.84 US before the New York Stock Exchange halted trading.
An NYSE spokesman said that it wasn't known when trading in the ADRs might resume and that CANTV is the only Venezuelan company listed on the stock exchange.
Shares in Canadian gold miner Crystallex International Corp. (TSX:KRY), which has the rights to the Las Cristinas gold project in Venezuela, also tumbled 9.4 per cent, or 42 cents, to close Monday at $4.03 Cdn on the Toronto Stock Exchange.
Chavez also said he would soon ask the National Assembly, which is controlled by his allies, to pass a special law giving him powers to approve such changes by decree.
Chavez said lucrative oil projects in the Orinoco River basin involving foreign oil companies should be under national ownership, although he did not spell out whether that meant a complete nationalization, or terms for companies that have been viewed as investing partners by his government.
He said a period known as the "oil opening" that preceded his government should be reversed.
"I'm referring to how international companies have control and power over all those processes of improving the heavy crudes of the Orinoco belt — no — that should become the property of the nation," Chavez said.
Chavez wants OAS secretary-general to resign
Chavez's nationalization announcement came in his first speech of the year, a fiery address in which he also called Jose Miguel Insulza, secretary-general of the Organization of American States, an "idiot," and urged him to resign.
Chavez lashed out at Insulza for questioning his government's decision not to renew the licence of an opposition-aligned TV station.
"Dr. Insulza is quite an idiot, a true idiot," Chavez said, using a vulgar Spanish term, after swearing in new cabinet members. "The insipid Dr. Insulza should resign from the secretariat of the Organization of American States for daring to play that role."
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