SNC-Lavalin quashes rumours of Atkins sale
Engineering, design, and construction giant SNC-Lavalin has denied suggestions that Atkins, the British engineering consultancy it bought in 2017, is up for sale.
When Atkins was purchased by the Montreal-based multinational, the British firm had 18,000 employees across Europe, the US, Middle East, and Asia, with annual revenues of £1.862 billion.
The past year and a half has seen SNC-Lavalin suffer numerous setbacks, reflected by its stock price falling from $60.47 in June 2018 to $24.65 today. SNC’s stock price rallied from a nadir of approximately $16 following the election of the federal Liberals, which puts the possibility of a plea deal back on the table for the firm’s corruption case.
In 2015 the RCMP filed charges against SNC alleging its executives paid $47.7 million in bribes to the Libyan government between 2001 and 2011 to secure lucrative contracts. If convicted, the firm would be ineligible for federal government contracts for 10 years – a major blow to SNC’s Canadian operations.
A Globe and Mail report in February alleged that the Prime Minister’s Office placed pressure on Attorney General Jody Wilson-Raybould to offer SNC a deferred prosecution agreement (DPA), which would have kept the company in the running for federal contracts. The attorney general subsequently resigned and was ejected from the Liberal caucus, while Trudeau’s principal secretary, Gerald Butts, also resigned.
The Ethics Commissioner earlier this year found that Prime Minister Trudeau contravened Section 9 of the Conflict of Interest Act by improperly pressuring the attorney general, though there are no sanctions under the Act for that violation.
Under the cloud of the affair, the company suffered on multiple fronts, with a $2 billion loss in its most recent fiscal half. Setbacks included a contract with Chilean copper miner Codelco collapsing and causing $350 million in write-offs, and the dissipation of opportunities in Saudi Arabia following Canada’s diplomatic spat with the authoritarian regime.
CEO Neil Bruce was replaced in June by Ian Edwards, who announced a major restructuring effort weeks into his tenure. In September, Edwards said the company would exit the field of big, fixed-price construction contracts, where bidders shoulder potential cost overruns, and pivot to a more stable engineering services-centred business model.
Reports in the British and Asian media, however, said that SNC was also in talks with Singaporean sovereign wealth fund Temasek to sell off Atkins. The Times reported that the firm had been approached by Temasek, amongst other potential bidders for Atkins.
SNC responded with a statement on news site Environment Analyst that it was “conclusively not looking at this.” The statement continued, “SNC-Lavalin’s new strategic direction has Atkins as a core element as we grow our Engineering Services; our other focus is on successfully completing the remaining work under our SNCL Projects business – these are lump-sum turnkey contracts that we are no longer bidding on going forward.”
The firm is currently finishing off a $4.6 billion backlog in lump-sum turnkey contracts.
