Astaldi defaults on four highway projects in Florida

23 April 2019 - 11:27 am UTC

Astaldi Construction Group has voluntarily defaulted on four state highway projects in Florida.

The projects impacted include:

  • USD 7.6m Halls River Road and Bridge replacement in Homosassa Springs, which is scheduled to be complete in summer 2019
  • Section 7A of the Wekiva Parkway project in Seminole County which is expected to be complete in summer2022
  • Widening of the Beachline – SR 528 in Orange County from six to eight lanes
  • USD 50m widening of US 301 in Hillsborough County, which includes the widening of approximately 4 miles of road and is expected to be complete in late2020

All four projects were procured as traditional design-bid-build projects.

The company, which filed for bankruptcy protection in October 2018, is now working with four surety companies to make sure all sub-contractors on the projects have been and will continue to be paid, according to an announcement by the Florida Department of Transportation (FDOT).

The sureties on the projects are:

  • American Home Assurance Co.
  • Zurich American Insurance Co.
  • Fidelity and Deposit Company of Maryland
  • Liberty Mutual Insurance Company

FDOT is also working with the four sureties to ensure new contractors are put onto each project with haste, and to ensure there is minimal impact on the projects’ deadlines. 

A spokesperson for the Wekiva Parkway Project said FDOT is in contact with the other companies who bid on the USD 108.3m project section and hopes to have a new contractor on board by the end of May.

There is no indication that the default has impacted any other projects Astaldi is working on in North America.

Background

Astaldi, an Italy-based engineering and construction firm, has been seeking partners willing to inject cash to save the business and help shape its long-term strategy.

Salini Impregilo, an Italian developer, said it will submit a detailed plan on 20 May to rescue Astaldi, its competitor. This date was pushed back from a prior 31 March deadline, which should give the company enough time to reach an agreement with other investors and lenders planning to participate in the rescue plan.

Astaldi’s financial troubles are linked to rising debt and inability to complete a planned sale of shares in the Bosphorous Bridge concession in Turkey. Astaldi announced in September 2018 it had entered into a creditor composition process which had effects on various projects. The company and its senior unsecured notes has since had its ratings downgraded twice by Standards and Poor’s (S&P), which currently lists its ratings at a D.

The company is involved in several projects worldwide, and in Canada is shortlisted for both the Hamilton and Hurontario LRT projects. Sources familiar with the projects and the Ontario market said Astaldi’s financial situation is influencing bidding on these projects.

 

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