Macro Enterprises Inc. reported Wednesday that Macro Spiecapag Trans Mountain Joint Venture, its 50/50 joint venture with Spiecapag Canada Corp., has received a notice of termination from Trans Mountain Pipeline L.P. to “terminate for cause” the construction contract for Spread 5B of the Trans Mountain expansion pipeline project due to ongoing challenges between the joint venture and Trans Mountain.
“Macro and Trans Mountain continue to be in discussions regarding future opportunities that are expected to contractually occur in early 2021,” the company stated in a Dec. 15 news release.
Meanwhile, the company has completed the reorganization plan, announced Nov. 27, 2020, related to the Coastal GasLink pipeline project.
In that announcemente, the company said it had entered into a non-binding memorandum of understanding with Spiecapag Canada Corp. whereby it would exchange its indirect 40% interest in the Coastal GasLink project for Spiecapag’s 50% interest in the Trans Mountain expansion.
"The reorganization will allow the Company to recognize a number of operational benefits and will permit Company management to focus its efforts on the TMEP Project and other strategic initiatives," the company stated.
Macro received a closing cash payment of $20 million, and is to receive a further $20 million payment on June 30, 2020, in satisfaction of all amounts owing to Macro by the Coastal GasLink joint venture.
Macro has agreed to continue to provide support to Spiecapag on the Coastal GasLink project by providing equipment and personnel to assist Spiecapag to complete that project. The company will be paid market-based rates and fees for such equipment and personnel.
The company remains on target to meet its fiscal 2020 annual revenue guidance of $250 million reported in its third quarter MD&A. This estimate considers the company's current core business underway and a pro-rata portion of its joint venture interests at the closing of the above-discussed reorganization plan. Margins are expected to remain consistent with the previous nine months reported for this year.
— with Alaska Highway News files
Email Managing Editor Matt Preprost at editor@ahnfsj.ca.
