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SNC-Lavalin To Sell Resources Oil & Gas Business To Kentech Corporate Holdings

SNC-Lavalin Group Inc. (SNC.TO) has entered into a binding agreement to sell its Resources Oil & Gas business, including Services and LSTK, de-risking operations and reducing LSTK delivery and warranty obligations. Closing is planned for second quarter, 2021. At closing, the deal is expected to create a gain on sale. The company expects the net cash impact for the transaction to be minimal. The company noted that a charge of $95 million on the retained Resources business, related to historical legacy positions and one remaining LSTK mining project, will be taken in fourth quarter 2020.

SNC-Lavalin Group has completed its review of legacy Lump-Sum Turnkey litigation matters. In fourth quarter, 2020, the company will be recognizing additional provisions of approximately $140 million, and a reduction in commercial claims receivable of $155 million.

SNC-Lavalin has also reviewed its remaining three Canadian LSTK infrastructure projects. The company expects to take a charge of approximately $90 million in fourth quarter, 2020 related to these projects.

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