UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0308
DIVISION OF
CORPORATION FINANCE
Mail Stop 03-08
September 16, 2005
Eduardo Villegas Contte
Chief Financial Officer
Metrogas, Inc.
Gregorio Araoz de Lamadrid 1360
(1267) Buenos Aires, Argentina
Re: Metrogas, Inc.
Form 20-F for the Fiscal Year Ended December 31, 2004
Forms 6-K for the Fiscal Quarters Ended June 30, 2005 and March
31,
2005
File No. 1-13342
Dear Mr. Contte,
We have reviewed the above referenced filings and have the
following comments. We have limited our review to only your
financial statements and related disclosures and do not intend to
expand our review to other portions of your documents. Where
indicated, we think you should revise your documents in response
to
these comments in future filings. If you disagree, we will
consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 20-F for the Year Ended December 31, 2004
Item 5. Operating and Financial Review and Prospects
Critical Accounting Policies and Estimates
1. In future filings, include quantification of the underlying
accounts and a discussion of changes and trends associated with
the
underlying accounts in your discussion of critical accounting
policies. For example, quantify the amount of expenses that you
recorded in each period for allowances and discuss any trends or
significant changes in your discussion of revenue recognition and
accounts receivable. Also, discuss any asset impairments incurred
as
well as the reasons for significant changes and trends
Disclosure of Contractual Obligations
2. We note that you did not include an amount in the contractual
obligations schedule for financial debt. All debt is classified
as
current on the balance sheet; therefore please include as such in
future filings.
3. We note from Note 15.2 that you are obligated to pay Ps. 1,049
million for the entire period between 2009 and 2020 for firm
transportation capacity under firm contracts. You only include
transportation capacity obligations through 2009 on the table of
contractual obligations and commercial commitments. Please
include
in future filings, payments due by period more than 5 years for
all
obligations as of the latest fiscal year end balance sheet in
accordance with Item 5.F of Form 20-F.
Item 11. Quantitative and Qualitative Disclosures About Market
Risk
4. Revise your discussion of interest rate risk related to debt
obligations to comply with one of the three disclosure
alternatives
permitted by Item 11(a) of Form 20-F. These disclosure
alternatives
include a tabular presentation, a sensitivity analysis, or value
at
risk disclosures.
Item 18. Financial Statements
Note 18. Summary of Significant Differences Between Argentine
GAAP
and United States GAAP
5. Statements of comprehensive income prepared using either U.S.
GAAP
or home-country GAAP are required for both Item 17 and Item 18
issuers. These statements may be presented in any format
permitted
by FAS 130. Reconciliation to U.S. GAAP is encouraged, but not
required. Please revise or advise us otherwise.
6. U.S. GAAP requires separate presentation of shareholders`
equity
components on the face of the balance sheet. Please include the
following as a reconciling item:
* For each class of common shares state the number of shares
issued
or outstanding, as appropriate, and the dollar amount thereof;
See
Rule 5-02.30 of Regulation S-X;
* For other shareholders` equity items, separate captions shall be
shown for: (1) additional paid in capital, (2) other additional
capital, (3) retained earnings, and (4) prepaid dividends. See
Rule
5-02.31 of Regulation S-X.
7. We note that you recorded an adjustment to the nominal value of
long-term receivables and liabilities for Argentine GAAP purposes,
but reversed for US GAAP purposes. Please further explain the
components of the adjustment, if the adjustment relates to an
impairment of long-lived assets, and why this adjustment was
reversed
for US GAAP purposes. See FAS 144. In addition, in Appendix B to
the AICPA International Practices Task Force meeting by telephone
on
March 6, 2002, the Task Force determined that receivable and loan
balances of Argentine companies should be assessed for impairment
based on current information and events.
* * * *
Please send us your response to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter keying your responses to our
comments
and provide any requested supplemental information. Please file
your
response letter on EDGAR. Please understand that we may have
additional comments after reviewing your responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Dave Irving, Staff Accountant, at (202) 551-
3321 or, in his absence, Donna Di Silvio, at (202) 551-3202, if
you
have questions regarding comments on the financial statements and
related matters. Please contact me at (202) 551-3841 with any
other
questions.
Sincerely,
Michael Moran
Branch Chief
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Mr. Eduardo Villegas Contte
Metrogas, Inc.
September 16, 2005
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