08/19/2013 05:19 EDT | Updated 10/19/2013 05:12 EDT

SNC-Lavalin appoints new executive to head infrastructure division

MONTREAL - SNC-Lavalin continues to shuffle executive positions and attract new blood, announcing the appointment Monday of Hisham Mahmoud to the newly created role of group president, infrastructure.

The appointment is effective early next year.

The Qatar and U.S.-educated engineer was hired away from rival AMEC, where he worked with another star recruit, Neil Bruce, who now heads SNC's resources and environment group.

SNC-Lavalin's new chief executive, Robert Card, has been adjusting his front bench as he tries to turn the page on the Montreal-based company's past, including ethical problems that continue to hurt its results and which have punished its share price.

Mahmoud will head a segment of SNC-Lavalin's (TSX:SNC) business which Card said in May would be a focus, along with resources and environment, and power.

"I know that Hisham's particular expertise in the infrastructure market internationally and his excellent understanding of the issues and evolving concerns of a company of the size and stature of SNC-Lavalin will serve us exceptionally well in our growth strategy," Card said in a news release.

Mahmoud, 47, will oversee all global infrastructure and related businesses, including transportation and operations and maintenance.

Asked where he would be based, the company said only that Mahoud's family is in Atlanta but that he would have global responsibilities.

Before joining AMEC in 2010, he worked 19 years at URS where he played a leadership role in their infrastructure business. He has more than 23 years experience with multinational engineering and construction companies, particularly in the transportation, water, buildings, facilities, industrial and commercial, environmental and government sectors.

Maxim Sytchev of Dundee Securities said the hiring of another well-respected "heavy hitter" is further proof of SNC's ongoing efforts to stabilize its operations by attracting senior people from very reputable, Tier 1 global firms who know exactly what the company needs.

"It looks, at least in terms of management depth, (that) it's certainly getting deeper so we're hoping that at some point the execution is going to follow the big names as well," Sytchev said in an interview.

SNC's Infrastructure division contributes about one quarter of the company's total revenues, but it is the second worst performing business after hydrocarbons and chemicals, generating a 1.1 per cent operating margin in 2012. The segment peaked at 13.3 per cent margin in 2009.

In addition to Bruce, SNC-Lavalin has appointed Andreas Pohlmann from Siemens as chief compliance officer and Alain-Pierre Raynaud from Areva as chief financial officer.

The latest appointment follows confirmation that Michael Novak, 59, is retiring by year-end after 27 years with the company. The husband of former Quebec justice minister Kathleen Weil is the most recent top official to leave the company. He has been registered by SNC-Lavalin as a lobbyist to the Quebec government.

Novak has been president of SNC-Lavalin International and was named among several executives in a $1-billion class-action lawsuit for allegedly assisting in making payments to secure contracts in Libya.

Sytchev said the "old guard" is all but gone at SNC-Lavalin.

"The new management team wants to have people they feel comfortable with and (a) type of situation like that I think is to be expected," he said of the new recruits.

Meanwhile, SNC-Lavalin declined Monday to confirm reports that it is among the global engineering companies interested in acquiring Irish oil and gas engineering firm Kentz Corp.

Published reports say Kentz has been approached by several companies, including AMEC, Germany's M&W and SNC-Lavalin. However, SNC says it won't comment on "rumours."

Sytchev said he didn't think SNC was in a position to contemplate a $1.3-billion acquisition with 14,000 employees until it resolves its ethical issues.

"From my perspective, right now, it's not the best timing."

However, he said acquisitions will be part of SNC-Lavalin's growth and it wouldn't be surprising to see a European target given the number of company executives from that part of the world.

On the Toronto Stock Exchange, SNC-Lavalin's shares closed at $40, down $1 or 2.44 per cent in Monday trading.