Nfld. & Labrador

Muskrat Falls contractor seeking protection from creditors: Reuters

Astaldi applied in a court in Rome following a delay in the sale of a bridge in Turkey, sending its shares to a record low.

Astaldi said Friday it will be 'able to carry on its operations'

This is a recent aerial view of the Muskrat Falls project in central Labrador. The project is more than 90 per cent complete, with first power forecast for late 2019. (Nalcor)

The principal contractor for the Muskrat Falls hydroelectric project, Astaldi, has filed for protection from its creditors, Reuters reports.

The Friday filing in a court in Rome comes after a delay in the sale of a bridge in Turkey.

The Italian company hoped to sell the Third Bosphorus Bridge in Istanbul in order to strengthen its cash holdings and reduce debt, which was $1.5 billion US at the end of 2017.

Under Italian regulations the creditor protection filing allows Astaldi to continue operations.

CBC News reported Thursday that Astaldi Canada had failed to remit $7.8 million Cdn to benefit plans for unionized workers at the Muskrat Falls site in central Labrador and owed PAL Airlines $4.3 million Cdn for flight services.

Astaldi's stocks dropped to a record low on Friday, down more than 19 per cent.

Astaldi responds

In a news release issued Friday afternoon, Astaldi said it "intends to avail itself of a proceeding conceived to manage this type of crisis and overcome a temporary financial stress."

It says that strain is partly because of a delay in selling a suspension bridge in Turkey "due to the political and economic/financial events that recently affected Turkey during 2018." 

"This crisis, in turn, has also led to delays in the start-up of some newly-secured contracts, in the collection of some advance payments and in the regular progress of some projects; therefore as at today the company believes that the targets set in the 2018-2022 Strategy Plan are no longer achievable," the statement reads.

Astaldi said it will be "able to carry on its operations on a going concern basis, continuing, among other things, to work on contracts under construction and to take part, in the manners authorized by the law, to new tenders," according to the statement.

The company said it is in the advanced stages of a new business continuity plan.

Nalcor monitoring the situation

Nalcor released a media statement Friday afternoon saying it is aware of Astaldi's move.

"The application allows the company to continue to work on contracts under construction during the process of composition with creditors 'with reservation.' Astaldi continues to work on site today and Nalcor continues to pay them in accordance with the requirements of the contract currently in place with them. Nalcor also has performance securities (i.e. letters of credit and bonds) under the contract that provide financial protections in situations where Astaldi doesn't meet its obligations under the contract," the statement said. 

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