Ferrovial unit appeals Canadian court decision over SNC Lavalin highway sale

MONTREAL (Reuters) - A unit of Spain’s Ferrovial S.A. is appealing a Canadian court decision over SNC Lavalin Group Inc’s former 10.01% stake in a toll highway, a source and the Montreal-based company told Reuters on Tuesday.

FILE PHOTO: The SNC-Lavalin logo is pictured outside the company headquarters building in Montreal, Quebec, Canada, May 5, 2019. REUTERS/Dario Ayala

Montreal-based SNC completed the sale of the stake in August to Canada Pension Plan Investment Board (CPPIB) for C$3.25 billion ($2.47 billion), in a deal that cannot be reversed on appeal, the construction and engineering firm said.

Cintra Global S.E. has given notice to the Court of Appeal for the Canadian province of Ontario that it will appeal the August ruling, the source said on condition of anonymity, in an effort to acquire shares from CPPIB.

Cintra, already a shareholder in Canada’s Highway 407 toll road operator, had argued it had a right of first refusal and should be allowed to buy up to 5.2% of the stake put up for sale by SNC.

The three companies had agreed in August that if the court’s decision were reversed on appeal, CPPIB and Cintra would adjust “the relevant number of shares of Highway 407” between them.

Cintra declined to comment.

An SNC spokeswoman confirmed Cintra was appealing the Ontario Superior Court decision, but said that it “has no impact” on the company.

The closely watched sale was aimed at paying down SNC’s debt at a time when the engineering and construction firm is restructuring its business, after wrestling with higher-than-expected expenses in its main unit.

SNC-Lavalin still has a 6.76% stake in Highway 407.

SNC stock closed up more than 12% on Tuesday to C$17.92 a share, after brokerage CIBC said it would resume coverage and set a price target of C$25.

($1 = 1.3142 Canadian dollars)

Reporting by Allison Lampert; Editing by Peter Cooney and Stephen Coates