General Cable Corp’s to Pay for Venezuelan Currency Devaluation (BGC)

General Cable Corp (NYSE: BGC) expects to incur a pre-tax charge ranging from $40-$45 million because of the devaluation of Venezuelan currency.

The devaluation of currency was done by the Venezuelan President Hugo Chavez to boost local production. The bolivar is pegged at 2.6 to the U.S dollar for essential items like food and medicine, but gives a lower rate of 4.3 to the U.S. dollar for other non-essential goods.

General Cable’s products, like copper, aluminum and fiber optics, are classified in the second category and hence expected to set off a higher amount in the pre-tax charges. It may be because of this that General Cable’s stock dropped by 30 cents from $31.84 to $31.58.