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.
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
For further information: Media, Daniela Pizzuto, Director, External Communications , 514-393-8000, ext. 54772, [email protected]; Investors, Denis Jasmin, Vice President, Investor Relations, 514-393-8000, ext. 57553, [email protected]