RE:RE:RE:RE:RE:LRT Ottawa Inquiry reportAlways a pleasure to read your exceptionally informative posts Gabriel. As you and others have already alluded to, this report - unfortunately - highlights the many, varied and extremely onerous challenges for any/all consortiums who pursue and "win" LSTK projects.
However, for SNC in particular, the issue of past-LSTK "wins" now has more to do with expense recovery and the inherent negotiation/adjudication/lawsuits that inevitably result.
To wit: I've continued with my previous analysis as to the potential recoveries that might exist for SNC which I'll highlight as follows (necessarily high-level, significantly variable and extremely speculative given lack-of-access to specific documention)...but also as a starting point for others to build on if/as they so choose:.
(1) Champlain Bridge: Gross Recovery: $379M x's (presumed) 33% Ownership ='s $125M x's (assumed) 66% Win Probability ='s $82.5M
(2) Eglinton Cross: Gross Recovery: $325M x's 25% Ownership ='s $81M x's 50% Win Probabilty re: "formal notice" issue referred back to Superior Court for rehearing ='s $40.5M
(3) Confederation: Partnership Lawsuit minus City Counter-Lawsuit ($230M - $130M) ='s $100M times (presumed) 40% Partnership Share ='s $40M x's 50% Win Probability ='s $20M
(4) Trillium: Project Value: $1.6B x's 100% Ownership x's (assumed) 5% Recovery ='s $80M
(5) Montreal REM: Value $6.3B x's (assumed) 30% Ownership x's (assumed) 2.5% Recovery (re: "cooperative/constructive relationship") ='s $47.25M
This admittedly "back-of-the-envelope" calc re: the above "expected recoveries" equals approx. $270M which is (non-too-surprisingly or completely coincidentallly ;-) only about 10% less than the $300M debt issue SNC just announced.
So, whaddya all think? Tell me where I'm completely right/wrong....too optimistic/pessimistic...off-my-rocker or right-on-target. Whatever the case, the key point I'm trying to make and quantify here is that whatever # we agree upon it'll be purely incremental to the current share price (whenever in future we may actually receive these recoveries, net legal fees of course ;-)
The Phoenix