Argentina’s Siderar Falls After Govt Slams Controller
Siderar SAIC (ERAR), Argentina’s largest steel producer, fell the most in 10 months after the government threatened to push down prices in retaliation for criticism of the economy from the company’s controlling shareholder.
Siderar sank 5.2 percent to 1.27 pesos at the close in Buenos Aires, the biggest drop since November 2011. The Merval benchmark index slid 1 percent.
Argentina’s Planning Minister Julio de Vido criticized Paolo Rocca, chairman of Siderar’s controller Ternium SA, this week for saying that the country has lost competitiveness since 2008. Deputy Economy Minister Axel Kicillof told television show 678 late yesterday that the government should drive down the price of steel to bankrupt Rocca for his remarks, but it won’t do so, La Nacion reported today.
“The fall is obviously because of the argument with the government,” Ruben Pascuali, an analyst at Mayoral Bursatil, said by telephone from Buenos Aires. “There’s fear this may lead to some sort of intervention, maybe a cut in subsidies.”
Newspaper Clarin cited Rocca as saying Sept. 3 that there hasn’t been any real investment in Argentina since 2008 when the country’s competitiveness started to decline. Ternium SA (TX) owns 61 percent of Siderar. Rocca ranks 87th on the Bloomberg Billionaire list with an estimated net worth of $10 billion.
Siderar’s press office didn’t respond to an e-mailed request for comment. Jessica Rey, a spokeswoman for Kicillof, didn’t respond to a phone call seeking comment.
Expropriating Siderar is unlikely, Pascuali said.
“They can’t go nationalizing everything or else there won’t be anybody left to pay corporate tax,” Pascuali said.
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