![](https://www.nsenergybusiness.com/wp-content/uploads/sites/4/2019/08/business-3152586_640.jpg)
SNC-Lavalin (TSX:SNC) is pleased to announce 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”). Based on the terms of the agreement, SNC-Lavalin received on closing the base purchase price proceeds of $3.0 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 Highway 407 ETR.
Net proceeds from this transaction will be used (i) for the repayment of approximately $600 million under the CDPQ loan agreement; and (ii) 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. This de-leveraged capital structure will better position us to deliver and execute on our recently announced new strategic direction,” said Ian L. Edwards, Interim President and Chief Executive Officer, SNC-Lavalin. “Proceeds from this transaction will enable SNC-Lavalin to undertake our planned course of action designed to achieve long-term financial strength.”
“SNC-Lavalin retains a 6.76% stake in Highway 407 ETR, along with a number of material investments in other Canadian assets,” confirmed Stephanie Vaillancourt, Executive Vice-President, Capital and Treasurer, SNC-Lavalin. “We believe that the value realized through this transaction demonstrates the inherent value in our Capital investments.”
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.
Source: Company Press Release