Caisse de dépôt et placement du Québec (CDPQ) said deterioration in the performance of SNC-Lavalin Group Inc (TSX: SNC), a Montréal-based construction and engineering company, is a “cause of growing concern.”
SNC Lavalin today reported lower results in 2019 than previously anticipated. It said it will alter strategic direction, including exiting lump-sum turnkey contracting and reviewing options for its resources unit.
CDPQ, which holds a 19.9 percent stake in SNC Lavalin, said the strategy must be comprehensive and “capable of reversing the current unacceptable trend of the business.”
In 2017, CDPQ backed SNC-Lavalin’s $3.6 billion acquisition of U.K.-based WS Atkins Plc.
Caisse reaction to SNC-Lavalin statement
Montréal, July 22, 2019
The deterioration of SNC-Lavalin’s performance, as indicated in the Company’s statement issued today, is a cause of growing concern for la Caisse. The situation of the Company requires decisive and timely action on the part of the Board.
We note the Company’s intention to make changes to aspects of its strategy. For the benefit of all the Company’s stakeholders, the new strategic direction must be comprehensive and capable of reversing the current unacceptable trend of the business. We also expect this strategy to be accompanied by a realistic plan for its execution.
La Caisse continues to believe that with the necessary changes in strategy and in execution, SNC-Lavalin has the capabilities to be a successful global business. We will continue to follow closely the Company’s decisions over the coming weeks.
ABOUT CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As at December 31, 2018, it held CA309.5 billion in net assets. As one of Canada’s leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure, real estate and private debt. For more information, visit cdpq.com, follow us on Twitter @LaCDPQ or consult our Facebook or LinkedIn pages.
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