SNC-Lavalin execs ponder company break-up at private shareholder luncheon

MONTREAL — Executives at SNC-Lavalin Group Inc. continue to ponder a Plan B that could see the company break up ahead of a potential criminal conviction.

David Taylor of Toronto-based Taylor Asset Management, a shareholder of SNC-Lavalin, says the embattled engineering and construction firm’s CEO and chief financial officer discussed spinning off assets — which could include U.K.-based WS Atkins — at a private luncheon hosted by TD Securities in Toronto.

The sit-down last Friday, first reported by the Globe and Mail, came a day after the company announced plans to wind down its operations in 15 countries and reported a $17-million loss in its latest quarter, precipitating a stock drop to new 10-year lows over the past few days.

The discussion floated an alternative to a possible plan that SNC-Lavalin laid out for federal prosecutors last fall where the company would split in two, move its offices to the United States within a year and eventually eliminate its Canadian workforce if it didn’t get a deal to avoid criminal prosecution.

Confidential documents, part of a PowerPoint presentation obtained by The Canadian Press in March, described something called “Plan B” — what Montreal-based SNC might have to do if it can’t convince the government to grant a so-called remediation agreement to avoid criminal proceedings in a fraud and corruption case related to projects in Libya.

SNC-Lavalin says in an email that it continues to evaluate all possible scenarios to maximize value for shareholders. It says has made it clear for several months that the company has a fiduciary obligation to investors and employees to have a Plan B in place and consider various scenarios with the help of external advisers.

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