The Globe and Mail reports in its Friday edition that shares in SNC-Lavalin Group are sinking as investors fret that Canada's biggest engineering firm will get caught in the crossfire of the Trudeau government's political row with Saudi Arabia.
The Globe's Nicolas Van Praet writes that the stock has fallen in two of the past three trading sessions since the dispute blew up a week ago, shedding another 94 cents Thursday to close at $53.80. Ottawa shows no sign of backing down while Saudi Foreign Minister Adel al-Jubeir has said his country is prepared to take further measures to punish Canada.
Of all Canada's companies, SNC might have the most to lose if the fight escalates. It has been working in the Middle East kingdom for five decades and generated nearly $1-billion in revenue from Saudi Arabia last year, representing about 11 per cent of total sales.
"The fallout from protracted political instability could be material" for SNC, said Maxim Sytchev, an analyst with National Bank of Canada, estimating an $81-million decline in fiscal 2019 earnings before interest and taxes in a worst-case scenario. Foreign Affairs Minister Chrystia Freeland called on the Saudis to release women's rights activists.
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