On 02 September 2008, Petrobras Energia Participaciones S.A (PEPSA) announced that its Board of Directors have approved its merger with Petrobras Energia S.A. (PESA), where in PESA will become the surviving entity. Such reorganization is aimed at cutting costs and simplifying the corporate structure. However we will continue to cover PEPSA until the entire process is complete or any further information is provided by the company. Given current price levels, we maintain our current rating for the PEPSA common stock until we fully reassess the company in our next update report. As we continue to anticipate a positive currency impact on the ADR in the medium term we do not anticipate a change in our current ADR rating.

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