The Address | Benghazi – Libya
MONTREAL – The new government of the Canadian province of Quebec has said it stands ready to protect Montreal-headquartered engineer and contractor SNC-Lavalin from hostile takeover after the company’s shares fell in October on the news that it would not be allowed to avoid a lengthy trial over bribery charges.
Premier François Legault, whose party, the Coalition Avenir Québec (CAQ), won the provincial election on 1 October, said steps should be taken to ensure the company, Canada’s largest construction firm, stays in the province, reports The Montreal Gazette.
Shares have fallen about 17% in 2018, with the steepest drop coming after the company revealed in October that Canadian prosecutors had ruled out a so-called a remedial deal over charges laid in 2015 in relation to its dealings in Libya.
Such a deal would have let the company, which has a market value of about CAN$8.3bn, defer prosecution in exchange for fines, improvements and cooperation.
To stop a takeover, investors in Quebec, including the government’s own investment arm, could cooperate to amass a “blocking” stake of at least 33% in SNC-Lavalin, the premier told media last week, suggesting also that the company might consider creating a dual-class share structure to prevent hostile acquisitions.
The company maintains it has transformed itself since a multifaceted corruption scandal erupted in late 2012.
In a statement to the Gazette, SNC-Lavalin said it “and the province share the desire to maintain our head office in Quebec; however, the ongoing legal challenges continue to weigh on the company”.
SNC-Lavalin’s Canadian workforce has shrunk to around 8,500, down from 20,000 in 2013, the Gazette said.
Canada’s national police force had laid charges last October against the SNC-Lavalin Group and two subsidiaries after a three-year investigation, alleging that between 2001 and 2011 the company offered millions of dollars in bribes, and defrauded Libyan officials of millions more.