Pension fund giant Caisse de dépôt et placement du Québec announced that it will take control of the McInnis Cement project in the Gaspé peninsula in the wake of massive cost overruns, reported Reuters Canada. It has also agreed to a new C$250 million ($192.56 million) round of financing to complete the Port-Daniel-Gascons facility.
Already an investor in the project, Caisse said it would invest an additional C$125 million with funds managed by BlackRock Alternative Investors, which is also investing C$125 million. A spokesman for Caisse said the McInnis Cement project faced between C$400 and C$450 million in cost overruns and that it had insisted on a "change of control and a change in management" for the C$1.1 billion cement plant.
The change will give Caisse a controlling stake in Beaudier Ciment, the controlling shareholder of McInnis Cement. "We believe that this project has high-quality fundamentals. For this reason, la Caisse has entered into a change-of-control agreement with Beaudier," said Caisse executive vice president Christian Dube.
Earlier this month, McInnis Cement announced management changes to strengthen and complete construction of the plant, including the appointment of Ronald Bougie as the executive vice-president of engineering, construction and operations. The company also announced the departure of CEO Christian Gagnon and that it is currently seeking his replacement.