Bitter Libyan experience could push SNC-Lavalin away from Malta

The Canadian engineering firm SNC-Lavalin, which has a 36% stake in a private consortium that owns the controlling 40% stake in Malta International Airport, may have taken "a political decision" to move out of Malta due to its proximity to a failed project in Libya.

An official comment from SNC-Lavalin was not forthcoming by the time of going to print, after chief financial officer Alain-Pierre Raynaud told analysts that the firm could sell its MIA stake "in the near term".

But a company insider speaking on the condition of anonymity told MaltaToday that SNC may have taken "a political decision" to distance itself from Libya, where the civil uprising against dictator Muammar Gaddafi cost the company some US$45.6 million, due to a client's attempt to draw on a credit line for the Libya work that SNC had abandoned.

"MIA could be an asset that SNC is ready to sacrifice after taking a political decision to move away from Libya... as for the Maltese government's share in MIA, the state is interested in seeing the revenues from the airport come in," the source said.

Michael Bianchi, an MIA director and the chairman of the Bianchi Group - which owns 10.63% in the Malta Mediterranean Link consortium that includes SNC and Vienna International Airport (53.24%) - said he was "not in a position to comment" on Raynaud's claims.

The Maltese government owns a 20% share in MIA, with the other 40% floated on the stock exchange. A government spokesperson said the state is not planning on acquiring the SNC stake.

In 2012, the government transferred the lease payments for the land and buildings at MIA to the government-owned company, Malita plc, which now finances the construction of the €80 million City Gate project in Valletta. MIA paid €905,000 in rent in 2012 and a will have paid a total of €4 million between 2013 and 2016. By the end of its 65-year lease, it will have paid €120 million.

41% of Malta International Airport's revenue - €21.5 million, from €52.5 million in 2011 - was earned from government entities like Air Malta.

The news of the possible divestiture comes against the backdrop of the project SNC abandoned in Libya in 2011 during the civil uprising against dictator Muammar Gaddafi, when a client attempted to draw on a $45.6 million credit line for the Libya work. Libyan projects at the time of Gaddafi's ouster included an airport, a prison and a water line network known as the Great Man-Made River.

Additional troubles for SNC come from a fraud investigation and investor lawsuits. According to documents published by the Canadian press, SNC paid $160 million in bribes to Gaddafi's son, in order to secure contracts in Libya. The documents led to a raid on the SNC headquarters by the Royal Canadian Mounted Police.

According to the Canadian Broadcasting Corporation, SNC-Lavalin's ties to Libya's former dictatorship ran so deep that the company offered Al-Saadi Gaddafi a six-figure job as a vice-president in 2008 and asked the Canadian government to grant him a temporary work permit to bring him to Canada.