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Quebec has no plans to offer struggling SNC-Lavalin a bailout: Minister

Last Updated Jul 24, 2019 at 2:10 pm EDT

Quebec Economy and Innovation Minister Pierre Fitzgibbon responds to the Opposition during question period, Tuesday, June 11, 2019 at the legislature in Quebec City. Quebec Economy Minister Pierre Fitzgibbon says the province will not offer financial help to SNC-Lavalin Group Inc. despite the construction giant's woes. THE CANADIAN PRESS/Jacques Boissinot

MONTREAL — Quebec Economy Minister Pierre Fitzgibbon says the province will not offer financial help to SNC-Lavalin Group Inc. despite the construction giant’s woes.

The minister says the Montreal-based company faces “obvious operational problems” but is not under financial stress that requires a bailout.

SNC-Lavalin slashed its profit forecast Monday for the third time this year as it shifts toward a stabler business model based on engineering services rather than fixed-price construction contracts where cost overruns can eat into profits.

The company now expects core adjusted losses of up to $175 million in the latest quarter, far worse than analysts’ previous expectations.

SNC-Lavalin, which faces ongoing bribery and corruption charges tied to business dealings in Libya, has seen its share price plummet by 62 per cent over the past year to about $21.

On Monday, Quebec’s Caisse de depot, SNC’s largest investor at nearly 20 per cent, took the rare step of publicly rebuking the firm, saying the situation “requires decisive and timely action” by the board.

 

Companies in this story: (TSX:SNC)

The Canadian Press