Venezuelan President Hugo Chavez announced plans today to nationalise the country's electrical and telecommunications companies, his boldest move yet to transform Venezuela into a socialist state.
"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 nationalised," Chavez said in a televised speech after swearing in a new Cabinet.
"CA 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 take a more radical turn toward socialism. Monday's announcement appeared likely to affect Electricidad de Caracas, owned by AES Corp., and CANTV, which is the country's largest publicly traded company.
CANTV's American Depositary Receipts plunged 14.2 percent to $16.84 (€12.95) before the New York Stock Exchange halted trading. The ADRs had been moderately higher before the announcement.
An NYSE spokesman said it was unknown when trading in the ADRs might resume and that CANTV is the only Venezuelan company listed on the stock exchange.
Chavez also said he would soon ask the National Assembly, which is solidly controlled by his allies, to approve a special law giving him powers to approve such changes by decree and without further approval.
Chavez also said that lucrative oil projects in the Orinoco River basin involving foreign oil companies should be under national ownership, though he did not spell out if that meant a complete nationalization, or under what 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.
Since last year, Chavez's government has been in talks with foreign companies involved in four heavy crude upgrading projects in the Orinoco on the formation of so-called "mixed companies" in which the state holds a majority stake.
Chavez threatened last August to nationalize CANTV, a Caracas-based former state firm that was privatized in 1991, unless it adjusted its pension payments to current minimum-wage levels, which have been repeatedly increased by his government.
Chavez's nationalization annoucement came in his first speech of the year, a fiery address in which he also called Organization of American States Secretary-General Jose Miguel Insulza an "idiot" and urged him to resign.
Chavez lashed out at Insulza for questioning his government's decision not to renew the license of an opposition-aligned TV station.
"Dr. Insulza is quite an idiot, a true idiot," Chavez said in a speech after swearing in new Cabinet members. He used a vulgar Spanish term that translates roughly as idiot. "The insipid Dr. Insulza should resign from the secretariat of the Organization of American States for daring to play that role."
AP