SNC-Lavalin to sell 10.01% stake of Highway 407 ETR to OMERS

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SNC-Lavalin announced that it has reached an agreement to sell 10.01% of the shares of 407 International Inc. (Highway 407 ETR), the world's first all-electronic, barrier-free toll highway located in the Greater Toronto Area (GTA), to OMERS.

As of today, Cintra Global S.E., a wholly owned subsidiary of Ferrovial S.A., owned 43.23% in Highway 407 ETR, while indirectly owned subsidiaries of Canada Pension Plan Investment Board owned 40% and SNC-Lavalin owned 16.77%.

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. The deal is expected to be completed within approximately two months.

The sale is subject to certain shareholders' rights, including rights-of-first refusal. SNC-Lavalin will retain a 6.76% ownership of Highway 407 ETR. This transaction is subject to customary closing conditions.

Net proceeds from this transaction will be used (i) for the payment of approximately $600 million under the CDPQ loan agreement, which has been recently amended; and (ii) for the execution of the Company's deleveraging plans. As for the remainder of the proceeds, the Company will continuously evaluate which capital allocation strategy, including buy-backs, would be the most accretive to shareholder value. 

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