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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Snc-Lavalin Group Inc    SNC   CA78460T1057

SNC-LAVALIN GROUP INC

(SNC)
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SNC Lavalin : provides update on sale of 10.01% stake of Highway 407 ETR

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05/17/2019 | 08:01am EDT

MONTREAL, May 17, 2019 /CNW Telbec/ - SNC-Lavalin (TSX: SNC) today provided an update with respect to the pending sale of 10.01% of the shares of 407 International Inc. ("Highway 407 ETR"), whose current shareholders consist of a subsidiary of Cintra Global S.E. ("Cintra"), itself a subsidiary of Ferrovial S.A. which owns 43.23% of the shares of Highway 407 ETR, and with indirectly owned subsidiaries of Canada Pension Plan Investment Board ("CPPIB") and SNC-Lavalin respectively owning 40% and 16.77% of the shares of Highway 407 ETR.

As announced on April 5, 2019, SNC-Lavalin initially entered into an agreement with OMERS to sell to it 10.01% of the shares it holds in Highway 407 ETR (the "Subject Shares"), subject to certain shareholders' rights, including rights of first refusal ("ROFR") in favour of certain other shareholders of Highway 407 ETR.

Prior to the expiry of the relevant notice and acceptance period, one of the CPPIB shareholders exercised its ROFR to purchase all of the Subject Shares on the same terms and conditions as those set out in the transaction documents with OMERS.  On the basis of the CPPIB exercise of its ROFR and in accordance with the sale contract, SNC-Lavalin terminated the transaction with OMERS subject to later payment of a break fee. Subsequently, the Cintra shareholder purported to exercise a ROFR to purchase up to a proportionate share of the Subject Shares, being approximately 51.95% of the Subject Shares.

SNC-Lavalin disputes the ability of the Cintra shareholder to exercise a ROFR in the present circumstances. Pursuant to an agreement entered into between SNC-Lavalin and Cintra in April 2002, Cintra unequivocally waived its ROFR and other shareholder rights with respect to all future sales of shares in Highway 407 ETR by SNC-Lavalin to any purchaser that does not have competing interests "in relation to construction, operations, asset management of, and investment in road or airport infrastructure projects other than solely as a financial investor such as a pension or superannuation fund". Cintra claims that OMERS, one of Canada's largest defined benefit pension plans, is a competitor of Cintra and does not fall within the waiver's clear exception for financial investors such as pension funds and that therefore its continuing waiver of its ROFR does not apply in the current circumstances.

SNC-Lavalin was recently advised of Cintra's intention to commence an application in the Ontario Superior Court, Commercial List, for a determination of its ability to exercise its alleged ROFR. SNC-Lavalin remains confident in its position that Cintra's claims and arguments are entirely without merit and that Cintra does not have the right to disrupt or participate in either the original sale transaction between SNC-Lavalin and OMERS, or in the sale transaction between SNC-Lavalin and CPPIB following the latter's valid exercise of its ROFR.

However, in connection with all of the above, the parties have agreed that Cintra's application may proceed by way of an expedited hearing on the merits with the hearing date currently scheduled for June 21, 2019 and with the expectation that a ruling would be issued by the Court shortly thereafter. In addition, all of the parties have further agreed that irrespective of the outcome and following  the Court's decision in first instance on the merits, SNC-Lavalin will be permitted to sell the Subject Shares, as soon as practicable after such decision, either to the CPPIB shareholder, or to the CPPIB Shareholder and the Cintra shareholder pro rata to their current share ownership in Highway 407 ETR on the terms and conditions of the transaction documents with OMERS. The agreement includes an undertaking by CPPIB and Cintra to adjust the purchaser-owner of the relevant number of shares of Highway 407 ETR so as to comply with any subsequent decision in the event of a different decision of an appellate court.

Consequently, regardless of the Court's decision on the merits in first instance, SNC-Lavalin expects to sell, shortly following the issuance of the first instance court decision, all of the Subject Shares on substantially similar terms and conditions as the original sale to OMERS and it will in that case receive the same amount of gross proceeds at closing.

About Highway 407 ETR

Highway 407 ETR is the best way to travel across the top of the Greater Toronto Area. Drivers make over 415,000 trips each workday and continue to report that using the toll road saves them significant time, reduces their fuel consumption and vehicle maintenance costs and staying out of gridlock and heavy traffic elsewhere means lower harmful CO2 emissions. Use of the toll road has increased steadily since opening in 1999 and is now well known as the route of choice for business to move goods efficiently and for people wanting to save time for the things that matter most.

About SNC-Lavalin

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, Clean Power, and Resources businesses. www.snclavalin.com

Forward-looking Statements

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.

 

SOURCE SNC-Lavalin

© Canada Newswire, source Canada Newswire English

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EBIT 2019 685 M
Net income 2019 781 M
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