Bankrupt Italian contractor Astaldi Construction Corp. appears poised to become an integral part of new Italian infrastructure conglomerate to be led by Milan-based contractor Salini Impregilo, resolving financial woes that left its North American operations in disarray.
As leader of the “Progetto Italia” (Project Italy) group of contractors and investment banks, Salini Impregilo would follow through on its February 2019 offer to purchase a 65% stake in Astaldi, including spending $325 million to help settle the troubled firm’s debts. According to Italian media reports, Progetto Italia hinges on a 600-million Euro recapitalization for Salini Impregilo, a deal expected to close this month.
Both firms declined to comment on their role in Progetto Italia, or its effect on Astaldi’s debt restructuring plan currently making its way through Italian bankruptcy courts.
Astaldi and Salini are already vying for new projects, having been selected in April for a 608- million Euro contract to build an 18.7-km high-capacity rail line between Naples and Bari. Astaldi, Italy’s third largest construction group, filed for bankruptcy in September 2018 after being unable to counter debt problems by selling off its one-third ownership of the Yavuz Sultan Selim Bridge across the Bosphorus in Istanbul.
Astaldi’s share was estimated at the time to be worth $462 million. Economic and political instability in Venezuela and other Latin American countries had already eroded Astaldi’s revenue.
Despite receiving a $86-million bridge loan from Fortress Investment Group of New York in January 2019, Astaldi’s worsening financial picture forced its Davie, Fla.-based U.S. subsidiary to abandon four unfinished Florida transportation projects in late March.
In the past month, the Florida Dept. of Transportation has approved surety bondholders’ selection of replacement contractors for most of the projects. SEMA Construction of Orlando will complete a $108.3-million contract to build a 3.5-mile section of the $1.6-billion Wekiva Parkway project in Seminole County. Watson Civil Construction of St. Augustine has taken over a $49.9-million project to widen 3.8 miles of US 301 in Hillsborough County, and the $7.6-million Halls River Bridge preplacement project in Citrus County.
Astaldi was also an equity member and joint venture contractor for Mobile River Bridge Group, a design, build, operate, and maintain team shortlisted last year for a major new toll bridge. According to the Alabama Dept. of Transportation, the group officially replaced Astaldi with FCC Construcción in January.
'No Issues' on California Project
Meanwhile, Astaldi remains a joint venture partner with OHL USA on the $1.9-billion I-405 Improvement Project in Orange County, Calif. Megan Abba, a spokesperson for the county Transportation Authority, says work on the six-year project that got underway in 2018 continues as scheduled.
“We have not experienced any issues related to [Astaldi’s] financial situation,” Abba says.
However, Astaldi’s Canadian subsidiary still faces questions over its role in the Muskrat Falls hydroelectric project on the Churchill River in Newfoundland. Contracted by Nalcor Energy to build the generating station’s powerhouse, transition dam and spillway for $1.1 billion in 2013, Astaldi was fired last year following a series of construction problems that have left the overall project years behind schedule, well over budget and the subject of a government investigation.