{"id":235474,"date":"2019-10-22T19:15:41","date_gmt":"2019-10-22T23:15:41","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=235474"},"modified":"2019-10-22T19:15:41","modified_gmt":"2019-10-22T23:15:41","slug":"snc-lavalin-shares-up-amid-hope-of-possible-plea-deal-after-2019-federal-election","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2019\/10\/22\/snc-lavalin-shares-up-amid-hope-of-possible-plea-deal-after-2019-federal-election\/","title":{"rendered":"SNC-Lavalin shares up amid hope of possible plea deal after 2019 federal election"},"content":{"rendered":"
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SNC-Lavalin declined to discuss the government’s intentions or comment on the ongoing court case. It is due back in court on Dec. 18. (File Photo: Marc Bruxelle \/ Shutterstock.com)<\/figcaption><\/figure>\n

MONTREAL \u2014 SNC-Lavalin Group Inc. shares shot up Tuesday after the Liberal election win left open the possibility of a plea deal on fraud and corruption charges against the engineering firm.<\/p>\n

The beleaguered company’s shares closed up nearly 14 per cent or $2.44 at $20.12, buoyed by investor hopes that the Liberal refusal to close the door on a deferred prosecution agreement will play out to SNC-Lavalin’s advantage ahead of a criminal trial.<\/p>\n

\u201cIt’s good for SNC,\u201d Prof. Karl Moore of McGill University’s Desautels Faculty of Management said of the newly elected Liberal minority government in Ottawa.<\/p>\n

\u201cI think the market sees it, not unreasonably, that they are in better shape than if the Conservatives had come in.\u201d<\/p>\n

Conservative Leader Andrew Scheer has lambasted Prime Minister Justin Trudeau for allegedly pressuring former attorney general Jody Wilson-Raybould to halt the criminal prosecution of SNC-Lavalin.<\/p>\n

Canada’s ethics commissioner concluded in August that Trudeau breached a section of the ethics code. Trudeau has said he disagrees with the commissioner’s findings but accepts them.<\/p>\n

Analyst Chris Murray of Altacorp Capital said that a resurgent Bloc Quebecois, which more than tripled its seat count to 32 on Monday, could fan hopes that the new Parliament might work to help the Montreal-based multinational.<\/p>\n

\u201cWith the performance of the BQ and the fact of a minority government, maybe some folks are optimistic that there could be a solution presented,\u201d Murray said.<\/p>\n

\u201cI’d also caution that there is a lot of history here…While it is up, I would be cautious 1\/8about 3\/8 getting too optimistic,\u201d he added.<\/p>\n

SNC-Lavalin declined to discuss the government’s intentions or comment on the ongoing court case. It is due back in court on Dec. 18.<\/p>\n

Attorney General David Lametti has refused to shut down the possibility of a remediation agreement with SNC.<\/p>\n

The company has seen its market value fall by roughly 60 per cent since January amid the SNC political scandal in Ottawa.<\/p>\n

SNC faces an upcoming trial on charges of fraud under the Criminal Code and bribery under the Corruption of Foreign Public Officials Act.<\/p>\n

Its shares plunged last October after the company revealed that federal prosecutors would not negotiate a deal that could reduce the time SNC spends in court fighting the charges laid against it in 2015.<\/p>\n

Last month interim chief executive Ian Edwards announced the company will quit the field of big, fixed-price construction contracts \u2014 where the bidder shoulders any cost overruns \u2014 and pivot to a more stable business model that revolves around engineering services.<\/p>\n

\u201cAfter a challenging first half of 2019, SNC is on a road to recovery with several positive steps including simplifying its business and limiting its exposure towards lump-sum turnkey (LSTK) construction projects,\u201d said Laurentian Bank Securities analyst Nauman Satti in a note to investors Monday.<\/p>\n

Satti said investor confidence \u201cshould gradually start to recover\u201d as the firm runs off the bulk of its $4.6-billion LSTK backlog.<\/p>\n

\u201cThe completion of the partial sale of Hwy. 407 asset has provided a much needed improvement to the balance sheet, albeit at the expense of a good asset,\u201d he added.<\/p>\n

Spanish multinational Ferrovial S.A. is currently appealing a court decision that cleared the way for SNC’s partial sale of its stake in the Ontario toll road to the Canada Pension Plan Investment Board, the proceeds of which the company plans to put toward debt repayment, including a $600-million payment on a loan from the Caisse.<\/p>\n

Companies in this story: (TSX:SNC)<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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