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Site C contractor Petrowest confident of debt restructure

Petrowest Corp., a partner in the conglomerate contracted to build the Site C dam, is confident it will be able to restructure its debt within a new deadline set by lenders.
site c
Petrowest CEO Rick Quigley speaks at an November 2015 announcement naming the Peace River Hydro Partners consortium, of which Petrowest is a member, as the main civil works contractor for Site C.

Petrowest Corp., a partner in the conglomerate contracted to build the Site C dam, is confident it will be able to restructure its debt within a new deadline set by lenders.

Creditors have granted the company until the end of the month to amend its existing credit agreements, an extension of the original Feb. 29 deadline.

"They (the banks) obviously want to work with us," Petrowest VP Investor Relations Nikolaus Kiefer told the Alaska Highway News. "We're the one positive story coming out of Calgary these days, sadly, with the commodity prices."

The company is working to restructure debt accrued in the 12 months leading up to the award of the Site C contract, the largest in the company's history.

The terms of the $1.75-billion agreement were released Dec. 21. Petrowest holds a 25 per cent stake in the Peace River Hydro Partners conglomerate, which includes Acciona Infrastructure Canada and Samsung E&C America Inc., the Korean firm's construction arm.

The group will be responsible for building the earth filled dam and tunnels to divert the flow of the Peace River, as well as the concrete base for the generating station.

Petrowest, which also builds oil and gas well pads and access roads, has weathered the oilpatch downturn better than some construction companies.

However, it is still feeling the pinch. Kiefer said the company expects to see its share of revenues from oilpatch construction shrink from 35 to 15 per cent in 2016.

"Obviously Site C will get underway and then affect the financials moving (forward), but it won't affect the trailing 12-month numbers until halfway through the year," Kiefer said.

In a statement, Petrowest Chief Financial Officer Lloyd Wiggins said Site C would put the company on a "transformational growth trajectory entering 2016."

"It is encouraging to receive the continuing support from our lenders as we enter these transformational times," Wiggins said.

When the main civil works contract was announced in November, Premier Christy Clark touted Petrowest's connection to Fort St. John, where CEO Rick Quigley lives.

Petrowest also holds a subcontract to prepare land for the Site C work camp.

Fourth quarter 2015 results for the company will be released March 17.

The $8.8-billion project will flood 83 kilometres of the Peace River Valley.

reporter@dcdn.ca