Argentine crisis won't affect Makhteshim-Agan, says CFO

Argentina contributes only 2.5% of MAI's sales, says analyst
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Makhteshim-Agan today said there is no reason for the ostensible debt crunch in Argentina to affect its share price, which was down 4.4% shortly before closing on the Tel Aviv Stock Exchange on Tuesday.

"Nothing new has happened in Argentina in the last few days and there is no justification for MAI's drop on the TASE today," stated CFO Eli Assraf.

Argentina has been in trouble for some time, Assraf continued. Its troubles derive mainly from misuse of an inflated government budget, and its enormous external debt that forces it to raise capital at insane interest of 25%, he said. None of this is new.

The reason for the sudden interest in Argentina is the election of a new government, he added, which decided to tackle the nation's tremendous debt, and to try to swap government bonds for others bearing lower interest.

Even a worst-case scenario for Argentina could not justify the pummeling MAI stock took on the TASE today, Assraf concluded.

True, MAI does business in Argentina, but not much any more. Leader DS investment house analyst calculated that Argentina generates no more than 2.5% of MAI's total sales.

MAI is not looking to drum up new business in Argentina, Assraf said. It does business with veteran customers, with an aim to reducing their debt to the company.

The company does more business in Brazil, which has felt fallout from its neighbor's travails. The Brazilian real has already depreciated by 40% this year. But experts believe the Brazilian currency already incorporates the bad news from Argentina, and is not likely to weaken further in the wake of today's developing events.