MONTREAL, March 25, 2019 /CNW Telbec/ - SNC-Lavalin
(TSX: SNC) announces that Codelco, its client on its Mining &
Metallurgy project indicated in the February
11th, 2019 and January
28th, 2019 press releases has terminated its
contract with SNC-Lavalin and initiated a drawdown on its
approximately US$42M in bank
guarantees.
We are appalled and surprised by the decision taken by Codelco
today. We had reached an agreement in good faith on February 1st, 2019 regarding the full
completion of the project and a process for a fast track dispute
resolution of previously announced unresolved issues through
accelerated arbitration. As we are nearing the end of the project
completion, the client's actions will put the completion and
commissioning date, as stated in good faith by SNC-Lavalin last
week, further at risk. We believe that this termination is
unwarranted and in breach of good faith agreements reached by the
Parties. It should be noted that Codelco has reached this decision
after SNC-Lavalin openly informed Codelco of the status of the
execution of the works, as requested by Codelco, which showed
delays caused by site conditions that were the responsibility of
Codelco, and the poor and unjustified acts by the main construction
subcontractors.
Effective immediately, we are demobilizing the job site and are
assessing the legal and financial impact of Codelco's decision and
preparing the dispute resolution actions to recover as much as
possible of the previously announced losses that are due directly
to our client and to poor sub-contractor performance. Further
details will be provided during the Company's next earnings
conference call and webcast.
About SNC-Lavalin
Founded in 1911,
SNC-Lavalin is a global fully integrated professional services and
project management company and a major player in the ownership of
infrastructure. From offices around the world, SNC-Lavalin's
employees are proud to build what matters. Our teams provide
comprehensive end-to-end project solutions – including capital
investment, consulting, design, engineering, construction,
sustaining capital and operations and maintenance – to clients
across oil and gas, mining and metallurgy, infrastructure, clean
power, nuclear and EDPM (engineering design and project
management). On July 3, 2017,
SNC-Lavalin acquired Atkins, one of the world's most respected
design, engineering and project management consultancies, which has
been integrated into our sectors. www.snclavalin.com
SOURCE SNC-Lavalin