August 7, 2019 / 1:32 PM / a month ago

SNC-Lavalin says court okays highway stake sale to CPPIB

FILE PHOTO: The SNC-Lavalin Group Inc., headquarters seen in Montreal, Quebec, Canada, February 12, 2019. REUTERS/Christinne Muschi

(Reuters) - Construction firm SNC-Lavalin Group Inc (SNC.TO) said on Wednesday a ruling by a Canadian court would allow it to proceed with the sale of its 10.01% stake in a Canadian toll highway to Canada Pension Plan Investment Board (CPPIB).

Two shareholders in the Highway 407 toll road operator were trying to acquire SNC’s stake for C$3.25 billion ($2.41 billion), with the dispute headed to Ontario Superior Court on June 21 to settle which one of them would buy the stake. [nL2N22T0L9]

SNC shareholders have been closely watching the Highway 407 sale, which will be used to pay down debt.

SNC has been struggling with a host of issues. In the last couple of months, the company has withdrawn its full year forecast, announced plans to exit fixed price contracts and 15 countries, restructure its business into two reporting lines and explore options for its resources business.

Last week, SNC cut its dividend and reported a wider-than-expected loss in its main engineering and construction unit, as expenses run high.

Reporting by Shanti S Nair in Bengaluru; Editing by Shailesh Kuber

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