SNC-Lavalin completes sale of 10.01 percent of Hwy 407 toll roadCompanies & People SNC-Lavalin
The firm received $3 billion, with up to an additional $250 million contingently payable over a period of 10 years.
SNC-Lavalin announced that it has completed the sale of the 10.01% stake of 407 International Inc. (“Highway 407 ETR”) to a company controlled by Canada Pension Plan Investment Board (“CPPIB”).
Initially in early April the firm was set to sell the stake in the toll road to the Ontario Municipal Employees Retirement System pension fund (OMERS), but in May the CPPIB, which already owns a 40% stake in Highway 407 exercised its right of first refusal.
Based on the terms of the agreement, SNC-Lavalin received on closing the base purchase price proceeds of $3 billion, with up to an additional $250 million contingently payable over a period of 10 years, conditional on the attainment of certain financial thresholds related to the ongoing performance of the toll road.
The firm announced that net proceeds from the transaction will be used for the repayment of approximately $600 million under the CDPQ loan agreement; and for the execution of the Company’s deleveraging plans, including paying down the revolving credit facility and the bridge loan.
“The closing of the sale is an important milestone for SNC-Lavalin that contributes to a strengthening of our capital structure,” said Ian Edwards, interim president and CEO, SNC-Lavalin. “This de-leveraged capital structure will better position us to deliver and execute on our recently announced new strategic direction.”
Following the closing of the deal, the shareholders of Highway 407 ETR will now consist of companies controlled by CPPIB owning approximately 50.01% of the common shares, a subsidiary of Cintra Global S.E., itself a subsidiary of Ferrovial S.A., with 43.23% of the shares, and SNC-Lavalin, with 6.76% of the common shares.
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