Willbros Group, Inc. announced June 27 that it had reached full and final agreement with TransCanada on the amount due to its U.S. construction subsidiary under a cost reimbursable target price construction contract for seven pump stations in Nebraska and Kansas.
Willbros will receive $61 million in cash as payment for its outstanding receivables of $71.2 million, which were disputed by TransCanada. Willbros has agreed to waive all claims for additional fees and change orders. TransCanada agreed to relieve Willbros of any further liability with respect to the contract and to restore Willbros to its bid list for future work.
Willbros noted that it will incur a non-cash charge in its second quarter 2011 results of $8.8 million associated with this settlement agreement. Upon receipt of the funds, Willbros intends to use $40.0 million of the cash settlement to retire term loan debt.
Randy Harl, president and CEO of Willbros, remarked, “We are pleased to have reached agreement with TransCanada on this significant contractual issue and we look forward to restoring our relationship with an important customer. The resolution of this dispute enables us to strengthen the company’s balance sheet and gives us greater flexibility to continue delivering on our objective to reduce debt.”