HOUSTON, June 27, 2011 /PRNewswire/ -- Willbros Group, Inc. (NYSE: WG) announced today that it had reached full and final agreement with TransCanada PipeLines Limited ("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 that were disputed by TransCanada and 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, the Company intends to use $40.0 million of the cash settlement to retire term loan debt.
Randy Harl, President and Chief Executive Officer, 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."
Willbros Group, Inc. is a global contractor specializing in energy infrastructure serving the oil, gas and power industries. Our offerings include engineering, procurement and construction (individually or as an integrated "EPC" service offering), refinery turnarounds, ongoing maintenance and other specialty services to industry and government entities worldwide. For more information on Willbros, please visit our web site at www.willbros.com .
This announcement contains forward-looking statements. All statements, other than statements of historical facts, which address activities, events or developments the Company expects or anticipates will or may occur in the future, are forward-looking statements. A number of risks and uncertainties could cause actual results to differ materially from these statements, including the potential for additional investigations; disruptions to the global credit markets; the global economic downturn; fines and penalties by government agencies; new legislation or regulations detrimental to the economic operation of refining capacity in the United States; the identification of one or more other issues that require restatement of one or more prior period financial statements; contract and billing disputes; the integration and operation of InfrastruX; the possible losses arising from the discontinuation of operations and the sale of the Nigeria assets; the existence of material weaknesses in internal controls over financial reporting; availability of quality management; availability and terms of capital; changes in, or the failure to comply with, government regulations; ability to remain in compliance with, or obtain waivers under, the Company's loan agreements and indentures; the promulgation, application, and interpretation of environmental laws and regulations; future E&P capital expenditures; oil, gas, gas liquids, and power prices and demand; the amount and location of planned pipelines; poor refinery crack spreads; delay of planned refinery outages and upgrades; the effective tax rate of the different countries where the Company performs work; development trends of the oil, gas, power, refining and petrochemical industries and changes in the political and economic environment of the countries in which the Company has operations; as well as other risk factors described from time to time in the Company's documents and reports filed with the SEC. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.CONTACT: Michael W. CollierVice President Investor RelationsSales & MarketingWillbros713-403-8038 Connie DeverDirector Strategic PlanningWillbros713-403-8035 SOURCE Willbros Group, Inc.
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