- - $82 million deal represents an after tax gain of approximately $30
to $35 million - -
TORONTO, Jan. 4 /CNW/ - Aecon Group Inc. (TSX:ARE) announced today that
it has completed the previously disclosed sale of its 25% interest in
the Cross Israel Highway concessionaire, Derech Eretz Highways (1997)
The $82.3 million sale to Shikun & Binui Holdings Ltd. (previously a
37.5% partner in the concession) and T.S.I. Roads Limited Partnership,
a consortium headed by Israel Infrastructure Fund (the IIF consortium),
was completed December 31, 2010. The sale will generate cash proceeds
to Aecon of $65 - $70 million and an after tax gain of approximately
$30 to $35 million.
In a related transaction, Africa Israel Investments Ltd. sold its 37.5%
share of DEC to the IIF consortium. The end result of the two
transactions is that Shikun & Binui Holdings Ltd. and the IIF
consortium each now own 50% of DEC.
Excluded from the transaction are Aecon's interests in Derech Eretz
Highways Management Corporation Limited, the operator of the Cross
Israel Highway, in which Aecon holds a 30.6% interest, as well as
Aecon's interests in several affiliates of the operator that operate
other transportation infrastructure assets in Israel.
"We believe this transaction is an affirmation of the public/private
partnership model for developing public infrastructure, a model that
was pioneered in the development of the Cross Israel Highway," said
John M. Beck, Aecon's Chairman and CEO. "The gains realized through
this sale, which are in addition to the profits Aecon earned from its
role in construction and operation of the highway, highlight the merits
of our strategy of participating in such selected partnerships as both
developer and contractor."
"I am grateful to our partners in DEC and to the State of Israel and its
representatives, who made our participation in this very successful and
innovative project possible," Mr. Beck said.
Aecon Group Inc. is Canada's largest publicly traded construction and
infrastructure development company. Aecon and its subsidiaries provide
services to private and public sector clients throughout Canada and on
a selected basis internationally. Aecon is pleased to be recognized as
one of the Best Employers in Canada as published by Maclean's Magazine.
The information in this press release includes certain forward-looking
statements. These "forward-looking" statements are based on currently
available competitive, financial and economic data and operating plans
but are subject to risks and uncertainties. In addition to general
global events outside Aecon's control, there are factors which could
cause actual results, performance or achievements to vary from those
expressed or inferred herein including risks associated with an
investment in the common shares of Aecon and the risks related to
Aecon's business, including Large Project Risk and Contractual Factors.
Risk factors are discussed in greater detail in the section on "Risk
Factors" in the Final Short Form Prospectus filed on October 1, 2010
and available at www.sedar.com. Forward-looking statements include information concerning possible or
assumed future results of operations or financial position of Aecon, as
well as statements preceded by, followed by, or that include the words
"believes," "expects," "anticipates," "estimates," "projects,"
"intends," "should" or similar expressions. Important factors, in
addition to those discussed in this document, could affect the future
results of Aecon and could cause those results to differ materially
from those expressed in any forward-looking statements.
SOURCE Aecon Group Inc.
For further information:
Senior Vice President,
Aecon Group Inc.