Why SNC would be bought up long before it went out of business
In explosive testimony Wednesday, Jody Wilson-Raybould alleged that she faced sustained pressure from the Prime Minister’s Office, the Privy Council Office, and Finance Minister Bill Morneau’s office to solve a legal problem for SNC-Lavalin Inc. (SNC.TO) amid warnings that the construction firm might leave Canada.
The former justice minister and attorney general told lawmakers in Ottawa that Prime Minister Justin Trudeau and his top aides tried for months to help SNC avoid trial for charges of bribing Libyan officials, in order to prevent job losses and the company’s relocation to London, U.K.
“The prime minister raised the issue immediately. The prime minister asked me to help out, to find a solution here for SNC," Wilson-Raybould said, referring to a Sept. 17 meeting with Trudeau.
Wilson-Raybould said she told Trudeau her decision was made. “The prime minister again cited the potential loss of jobs and SNC moving," while also stressing that he represents an electoral district in Quebec.
In her testimony, Wilson-Raybould added that Michael Wernick, the clerk of the privy council, also said “there is a board meeting on [Sept. 20] with stock holders” and warned that the company “will likely be moving to London” without an intervention.
On Thursday, Trudeau was asked by a reporter if SNC had threatened to move from Canada. “We know that there are many factors that go into decisions like that,” Trudeau said in Saint-Hubert, Quebec. “But we also know that it is something pretty fundamental that all Canadians expect of their governments – to look for ways to protect Canadian jobs and ensure that we continue to grow the economy.”
But has SNC, which employs about 9,000 people in Canada, actually considered moving its operations? The company has not explicitly expressed publicly that it’s looking to relocate, and it declined to comment on the matter when reached by BNN Bloomberg on Thursday.
Here’s a look at what the company has told investors so far about reviewing options:
In SNC’s 2018 Management’s Discussion and Analysis:
“Having regard to the uncertainty regarding a remediation agreement, in December 2018 the board of directors of SNC-Lavalin established a special committee to consider options that would protect value for SNC-Lavalin stakeholders."
Neil Bruce, chief executive of SNC, in a fourth-quarter conference call on Feb. 22:
“To be right, we will ensure that we continue to maximize shareholder value and we'll work to protect our innocent employees and stakeholders.”
Asked if SNC is seeking business growth outside of Canada, Bruce said:
“We've got plenty of opportunities to grow the business, outside of Canada. But also we are committed to the Canadian market and to our Canadian employees as well.”
Asked if SNC will consider splitting or selling parts of the company, Bruce said:
“As we said before, we are constantly looking at – [and] our priority is – maintaining and looking after shareholder value. And with that mind, we continue to look at all of the future opportunities.”
Asked what is the right way for SNC to protect shareholder value, Bruce said:
“We're going to defend ourselves against the charges, and we need to make sure that whatever we do minimizes or eliminates the effects, should the worst come to the worst – which we don't believe it actually will – but it's very much linked to that.”