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

Penticton RCMP, Fire Department, BCEHS salute hospital workers

“You’re awesome” and “Thank you” say Penticton first responders, passing by emergency entrance

UPDATE: 6.5-magnitude earthquake in Idaho shakes B.C. Interior

An earthquake was reportedly felt just before 5 p.m. throughout the Okanagan

COVID-19: Non-profit 3D printing face shields for local hospital

‘The response has been completely overwhelming’

LETTER: Thanks to those providing essential services

Regional District of Okanagan Similkameen board chair recognizes efforts and dedication

Summerland Earth Week events affected by COVID-19

Individual focus rather than group activities during pandemic

B.C. records five new COVID-19 deaths, ‘zero chance’ life will return to normal in April

Province continue to have a recovery rate of about 50 per cent

Community drums up support for North Okanagan hospital workers

Even health care workers and fellow first responders turned out to show love

John Horgan extends B.C.’s state of emergency for COVID-19

Premier urges everyone to follow Dr. Bonnie Henry’s advice

B.C.’s first community COVID-19 death was dentist ‘dedicated’ to health: lawyer

Vincent was 64 when he died on March 22 after attending the Pacific Dental Conference

Two inmates at prison housing Robert Pickton test positive for COVID-19

Correctional Service of Canada did not release any details on the identities of the inmates

‘April Fools’ social media prank leads to criminal investigation in Osoyoos

Post claims individuals will be canvassing door to door seeking housing for seasonal workers

Stay inside vehicles on Interior ferry crossings to prevent spread of COVID-19: B.C. government

Glade, Kootenay and Arrow Lakes some of the ferry crossings in Interior

Grocery pickups and other supports available for Shuswap seniors living at home

BC 211 is another way to connect with Shuswap Better at Home program

Neighbours surprise and move Shuswap health-care worker with their appreciations

Residents in subdivision greet neighbour on return from work at Salmon Arm hospital

Most Read