MONTREAL, Aug. 7, 2019 /CNW Telbec/ - SNC-Lavalin (TSX: SNC) is pleased to announce that it will be proceeding with closing the sale of the 10.01% stake in 407 International Inc. ("Highway 407 ETR") with Canada Pension Plan Investment Board ("CPPIB") following the dismissal by the Ontario Superior Court, Commercial List (the "Court") of the application by Cintra Global S.E. ("Cintra"). The Court agreed with SNC-Lavalin and CPPIB that Cintra had waived, through an agreement with SNC-Lavalin in 2002, its right of first refusal ("ROFR") with respect to the original sale transaction concluded with OMERS in April 2019. SNC-Lavalin currently expects the closing of the sale with CPPIB to occur within the month.
As previously announced, SNC-Lavalin, Cintra and CPPIB have agreed that even if the Court's decision were to be reversed on appeal, SNC-Lavalin's sale to CPPIB would not be reversed. Instead, CPPIB and Cintra would adjust the purchaser-owner of the relevant number of shares of Highway 407 ETR as between them.
Based on the terms of the agreement, gross proceeds to SNC-Lavalin from the sale could reach $3.25 billion in aggregate, $3.0 billion payable at the closing date and $250 million over a period of 10 years, conditional to certain financial thresholds related to the ongoing performance of Highway 407 ETR. Net proceeds from this transaction will be used to strengthen the balance sheet and more specifically for the execution of the Company's deleveraging plans.
Background of the announcement
Prior to the closing of the sale transaction, the current common shareholders of Highway 407 ETR consist of a subsidiary of Cintra, itself a subsidiary of Ferrovial S.A., which owns 43.23% of the common shares, indirectly owned subsidiaries of CPPIB which own approximately 40% of the common shares, and SNC-Lavalin which owns a total of 16.77% of the common shares.
Cintra commenced an application in the Court for a determination of whether it had validly exercised a ROFR with respect to the original OMERS transaction. SNC-Lavalin and CPPIB opposed the application on the basis that Cintra had waived its ROFR. The expedited hearing before the Court took place on June 21, 2019 and the Court's recent decision confirmed the position of SNC-Lavalin and CPPIB.
Founded in 1911, SNC-Lavalin is a global fully integrated professional services and project management company and a major player in the ownership of infrastructure. From offices around the world, SNC-Lavalin's employees think beyond engineering. Our teams provide comprehensive end-to-end project solutions – including capital investment, consulting, design, engineering, construction management, sustaining capital and operations and maintenance – to clients across the EDPM (engineering, design and project management), Infrastructure, Nuclear, and Resources businesses. www.snclavalin.com
Statements made in this press release that describe the Company's or management's estimates, expectations, forecasts, objectives, predictions, projections of the future or strategies may be "forward-looking statements", which can be identified by the use of the conditional or forward-looking terminology such as "aims", "anticipates", "assumes", "believes", "cost savings", "estimates", "expects", "goal", "intends", "may", "plans", "projects", "should", "synergies", "target", "vision", "will", or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts, including those relating to the anticipated future completion (including the timing thereof) of the sale by the Company of 10.01% of the shares of 407 International Inc. described in this press release as well as the benefits thereof to the Company, including its financial position. All such forward-looking statements are made pursuant to the "safe-harbour" provisions of applicable Canadian securities laws. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions and/or results could differ materially from those expressed or implied in such forward-looking statements, or could affect the extent to which a particular forward-looking statement materializes. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
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