TORONTO – Shares of Aecon Group Inc. fell more than 10 per cent after the infrastructure company announced $237 million in one-time charges related to its work on the Coastal GasLink pipeline project and three other large fixed-price legacy projects nearing completion.
Aecon — which was one of the prime contractors on the Coastal GasLink project — said it expects to take a $127 million non-recurring charge relating to the construction of two sections of the pipeline.
The terms of the settlement agreement are expected to result in no cash impact to Aecon.
The 670-kilometre Coastal GasLink pipeline — which runs from Dawson Creek, B.C., to the LNG C processing and export facility currently being built in Kitimat, B.C. — was completed last fall after five years of construction.
TC Energy Corp., the company behind the project, had previously said it was pursuing potential recoveries from contractors after the project’s budget ballooned from an initial $6.2 billion to $11.2 billion and then increased again to $14.5 billion over the course of construction.
Aecon said in a news release Friday that the Coastal GasLink settlement allows the company to “close the chapter” on one of the most technically and financially challenging projects in its history.
This report by The Canadian Press was first published July 2, 2024.
Companies in this story: (TSX:ARE; TSX:TRP)
