Sacyr shares dive after Panama Canal stoppage
Construction firm sees falls of 15 percent at one point after announcement by consortium
The shares of Sacyr fell sharply on Thursday, after a consortium led by the Spanish construction firm said the previous day that it had suspended work on the widening of the Panama Canal because of cost overruns.
Sacyr’s shares were down 15 percent at one point, although they recovered midway through the session slightly with a fall of nine percent.
The GUPC consortium – which also includes Italy's Impregilo, the Belgian firm Jan de Nul and the Panamanian company CUSA – said it was unable to complete the project based on the costs of the tender it won.
The group estimated the cost overrun at 1.6 billion dollars (1.16 billion euros) and asked the Panama Canal Authority (PCA) to make up the difference. The consortium said it had taken the decision to suspend work on the project because of the PCA’s failure to respond positively to its request.
In a statement filed with the National Securities Commission (CNMV), Sacyr accused the PCA of having failed to comply with the terms of the contract for the project, which was awarded to GUPC with a bid of $5.25 billion (3.8 billion euros).
Sacyr said the consortium had posted its claims for compensation for the cost overruns with a number of different institutions, including the International Chamber of Commerce’s International Court of Arbitration.