SNC eyes shedding assets, focus on Americas in new strategy
By Solarina Ho
TORONTO (Reuters) - Scandal-mired SNC Lavalin Group Inc SNC.TO reported a disappointing profit on Thursday as it laid out a growth strategy that would see it liquidate some infrastructure investments and focus on the lower risk markets of North and South America.
SNC, one of the world's largest construction and engineering companies, said under the new strategy the Montreal-based firm would leverage its expertise in resources, exit investments at maturity, potentially sell non-core assets and reduce its equity stakes in large investments in the medium term.
Some of the company's investments include overseas airports, rail, power, healthcare centers and highways.
"We believe the market will deem the strategic review and especially the eventual exit from mature concessions as a positive," said Maxim Sytchev, an analyst with Dundee Securities, in a research note.
"The same goes to de-risking company's profile by re-focusing on North and South America."
SNC, which did not give a specific time frame for the strategy, is trying to move forward from a series of corruption and ethics scandals involving former top executives after it uncovered tens of millions of dollars in mysterious payments more than a year ago.
Most recently, it reached a confidential settlement with the World Bank that excludes it from bidding on bank-sponsored projects for up to 10 years.
Chief Executive Robert Card, who took over in October, said on Thursday that shareholders should not worry about a repeat of such events. Continued...