2nd Sep 2019 14:07
(Alliance News) - President Energy PLC said Monday it does not expect the new currency controls implemented by the Argentinian government to affect trade or the company's performance in any way.
Shares in the Argentina-focused oil & gas firm were down 7.1% at 4.55 pence on Monday in London.
On Sunday, the government of Argentina announced certain currency controls to reduce market volatility following a week of financial uncertainty that caused a sharp drop in the peso.
Exporters have been ordered to seek permission from the Central Bank of Argentina before purchasing foreign currency, according to a decree published in the Official Bulletin.
In other new measures, transferring money abroad will now require government permission. And individuals seeking to buy dollars now face a monthly limit of 10,000 greenbacks.
Concerning a recent decree regarding oil prices, President Energy expects there to be a level of walking back from the full extent of the currency measures. The company said it would result from the reaction of producers and provinces which will includes court applications.
In mid-August, the Argentinian government issued a 90 day decree to limit fuel prices for customers.
"The Decree fixed, solely for oil producers, the base values for the peso/dollar exchange rate and the reference price of Brent used in the calculation of the oil price receivable," President Energy explained.
The exchange rate is fixed at 45.19 peso per dollar, with Brent fixed at USD59 per barrel.
The measures, which target capital flight will not restrict trade or are expected to affect President Energy's ability to service and repay its inter group debts, the company said.
"There is no denying the macro situation in Argentina is challenging and volatile and everyone who believes in the medium to long term prosperity of this country from all sides of the political spectrum hopes for a more stable position once the uncertainty of the impeding elections is resolved," said Chair Peter Levine.
"Shareholders should be assured that in these undoubtedly challenging times affecting the macro economy we remain calm, razor focused and confident in the future. With a well managed business, concentrating on cash flow and margins we prefer to and will see each challenge both as something to solve without delay and importantly as an opportunity," Levine added.
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