SNC-Lavalin Group Inc said on Tuesday it would sell its oil and gas business to Kentech Corporate Holdings Ltd, an energy services company backed by private equity firm Blue Water Energy, and focus on its high-performing engineering services.
The construction and engineering firm had announced restructuring actions in July 2019, including plans to exit fixed-price contracts to reduce its risk profile.
While the deal is expected to close in the second quarter of 2021, Montreal-based SNC-Lavalin expects a fair value write-down in the range of $260 million to $295 million, almost entirely non-cash in nature, in the fourth quarter of 2020.
The company said in a statement its resources unit will mainly comprise service projects in the mining and metallurgy division.
Kentech expects the deal to accelerate its revenue growth to $1 billion on a proforma basis by the end of 2021.
(Reporting by Shreyasee Raj in Bengaluru, Editing by Sherry Jacob-Phillips)