BATON ROUGE, La., Apr 14, 2003 (BUSINESS WIRE) -- The Shaw Group
Inc. (NYSE: SGR) ("Shaw" or "the Company") today announced that after
extensive negotiations it has agreed upon terms with PG&E; National
Energy Group ("NEG"), the project entities and their lenders for the
settlement of claims related to the completion of the Harquahala and
Covert power plant projects.
Under the proposed settlement, parties will enter into a new
agreement, which provides for a fixed-price contract to complete the
projects under revised schedules, and an increase of $65 million over
the original target prices. As a result of the agreement, the Company
will realize a $19 million after-tax charge relating to the settlement
of claims for the completion of the Harquahala and Covert power plant
Shaw, through its subsidiary Stone & Webster, Inc., is the EPC
contractor on the two projects. The Company has been in discussions
with NEG and its lenders since October 2002 regarding NEG's ability to
assure payment to the Company on the projects. Shaw recently announced
the termination of the contracts for these projects, but continued
work while in negotiations.
"Over the last several months, the management teams of NEG and
Shaw, along with representatives of NEG's lenders, have been working
diligently to come to a mutually agreeable resolution," stated J. M.
Bernhard, Jr., Shaw's Chairman, President and Chief Executive Officer.
"While we have experienced numerous challenges on these projects due
to NEG's financial difficulties, we are pleased to have reached an
agreement that eliminates litigation risk for all parties involved and
allows Shaw to complete these projects with reduced uncertainty."
The Company, NEG, the project entities and the lenders have
executed a term sheet which is subject to definitive documentation.
The parties are working diligently to that end and expect this
settlement to be consummated before April 30, 2003.
Shaw expects to complete Harquahala by September 2003 and Covert
by December 2003.
The Shaw Group Inc. offers a broad range of services to clients in
the environmental and infrastructure, power and process industries
worldwide. The Company is a leading provider of consulting,
engineering, construction, remediation and facilities management
services to the environmental, infrastructure and homeland security
markets. Shaw is also a vertically-integrated provider of
comprehensive engineering, consulting, procurement, pipe fabrication,
construction and maintenance services to the power and process
industries. The Company is headquartered in Baton Rouge, Louisiana
with offices and operations in North America, South America, Europe,
the Middle East and the Asia-Pacific region and employs approximately
17,000 people. For more information please visit our website at
For more information on The Shaw Group Inc., please contact Robert
L. Belk, Executive Vice President and Chief Financial Officer, at
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain forward-looking statements. The statements
contained herein that are not historical facts (including without
limitation statements to the effect that the Company or its management
"believes," "expects," "anticipates," "plans," or other similar
expressions) and statements related to revenues, earnings, backlog, or
other financial information or results are forward-looking statements
based on the Company's current expectations and beliefs concerning
future developments and their potential effects on the Company. There
can be no assurance that future developments affecting the Company
will be those anticipated by the Company. These forward-looking
statements involve significant risks and uncertainties (some of which
are beyond our control) and assumptions and are subject to change
based upon various factors. Should one or more of such risks or
uncertainties materialize, or should any of our assumptions prove
incorrect, actual results may vary in material respects from those
projected in the forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. A description of some of the risks and uncertainties that
could cause actual results to differ materially from such
forward-looking statements can be found in the Company's reports and
registration statements filed with the Securities and Exchange
Commission, including its Form 10-K and Form 10-Q, reports and on the
Company's web-site under the heading "Forward Looking Statement".
These documents are also available from the Securities and Exchange
Commission or from the Investor Relations department of Shaw. For more
information on the company and announcements it makes from time to
time on a regional basis visit our web site at www.shawgrp.com.
The Shaw Group Inc.
Robert L. Belk, 225/932-2500
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.