Neil Bruce, president and CEO of SNC-Lavalin, listens to proceedings at the engineering company’s annual shareholders meeting in Montreal on Thursday, May 2, 2019. Executives at SNC-Lavalin Group Inc. continue to ponder a Plan B that could see the company break up ahead of a potential criminal conviction. THE CANADIAN PRESS/Paul Chiasson

SNC-Lavalin execs ponder company break-up at private shareholder luncheon

“Plan B” — what Montreal-based SNC might have to do if it can’t convince the government to grant a so-called remediation agreement

Executives at SNC-Lavalin Group Inc. continue to ponder a Plan B that could see the company break up ahead of a potential criminal conviction.

David Taylor of Toronto-based Taylor Asset Management, a shareholder of SNC-Lavalin, said the embattled engineering and construction firm’s CEO and chief financial officer discussed spinning off assets — which could include U.K.-based WS Atkins — at a private luncheon hosted by TD Securities in Toronto.

“They mentioned spinning off,” Taylor said in an interview, referring to chief executive Neil Bruce and chief financial officer Sylvain Girard.

READ MORE: SNC-Lavalin to step back from 15 countries, swear off fixed-price bids in mining

“They’ve got great assets within that are being punished and their good assets aren’t being valued properly. So they sort of hypothetically talked about crystallizing that value, and the only way you can really do that is to sell,” Taylor said.

The sitdown last Friday, first reported by the Globe and Mail, came a day after the company announced plans to wind down its operations in 15 countries and reported a $17-million loss in its latest quarter, precipitating a stock drop to new 10-year lows over the past few days.

The discussion floated an alternative to a possible plan that SNC-Lavalin laid out for federal prosecutors last fall where the company would split in two, move its offices to the United States within a year and eventually eliminate its Canadian workforce if it didn’t get a deal to avoid criminal prosecution.

Confidential documents, part of a PowerPoint presentation obtained by The Canadian Press in March, described something called “Plan B” — what Montreal-based SNC might have to do if it can’t convince the government to grant a so-called remediation agreement to avoid criminal proceedings in a fraud and corruption case related to projects in Libya.

SNC-Lavalin said in an email that it “continues to evaluate all possible scenarios to create maximum value for company shareholders.”

“We have publicly made it clear for several months that the company has a fiduciary obligation to its shareholders and employees to have a Plan B in place, retaining the services of external legal and financial advisers to help develop different scenarios for consideration,” the company stated.

“That said, no decision has yet been made, so it is premature to comment further on the subject.”

READ MORE:Few SNC-Lavalin rivals have been granted DPAs, contrary to CEO’s claims

SNC-Lavalin bought British engineering giant WS Atkins in 2017, which now has more than 10,000 employees in Britain.

SNC hopes to sell the bulk of its 16.77 per cent stake in Highway 407 to the OMERS pension plan, with a deal expected to close before the end of June.

Companies in this story: (TSX:SNC)

The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Rainmakers of Haida Gwaii set to perform for Special Woodstock

20th festival will feature musicians with special needs and other bands from around the world

Haida Gwaii COVID cases climb to 24 over B.C. Day long weekend

10 cases active, 14 cases now recovered; 23 people also isolating as a result of contact tracing

Boon Docs comics illustrate Haida Gwaii health staff ‘Behind the Mask’

Family doctor and cartoonist Caroline Shooner shares inspiration for new comic series

Two Kwuna sailings cancelled on B.C. Day

BC Ferries making schedule adjustments on Aug. 3 to facilitate charter flight

Fishing lodge ‘shocked’ by B.C. ban on non-resident travel to Haida Gwaii

West Coast Fishing Club ‘shocked and stunned’ by travel restriction put in place July 30

B.C. records 146 new COVID-19 cases through long weekend

More that 28 people tested positive for the virus each day since Friday

B.C. paramedics responded to a record-breaking 2,700 overdose calls in July

Province pledges $10.5 million for expansion of overdose prevention response

Canada signs deals with Pfizer, Moderna to get doses of COVID-19 vaccines

Earlier in July both Pfizer and Moderna reported positive results from smaller trials

Canucks tame Minnesota Wild 4-3 to even NHL qualifying series

J.T. Miller leads Vancouver with goal and an assist

Cyclist in hospital after being hit by load of lumber hanging from truck on B.C. highway

A man is in hospital with broken ribs, punctured lung and a broken clavicle and scapula

COVID-19 vaccine efforts provide hope but no silver bullet to stop pandemic: Tam

There are more than two dozen vaccines for COVID-19 in clinical trials around the world

Two people die in propane heated outdoor shower near Princeton

Couple was attending a long weekend gathering

Racism in B.C. healthcare: Deadline for First Nations survey coming up on Aug. 6

Survey comes after hospital staff allegedly played a blood alcohol guessing game

‘We want to help’: As overdose deaths spike, beds lay empty at long-term Surrey rehab centre

John Volken Academy searching for ‘students’ to enlist in two-year residential treatment program

Most Read