Former SNC-Lavalin director demanding shareholder vote on Highway 407 sale
SNC-Lavalin plans to use the proceeds from the 407 deal to bolster its balance sheet and help pay down a $1.5-billion loan from the Caisse, Quebec's pension fund manager
TORONTO—Stephen Jarislowsky, a former director of SNC-Lavalin Group Inc. and one of Canada’s most outspoken investment managers, is demanding a shareholder vote on the company’s decision to sell the bulk of its stake in Ontario’s 407 toll highway operator for $3.25 billion.
Jarislowsky says such a big move, announced on April 5, runs counter to responsible management, as the engineering and construction firm’s 407 assets comprise about four-fifths of the company’s market valuation of $5.86 billion.
He says the investment compares to a government bond and promises higher profits as Toronto-area road traffic increases.
The deal will see the OMERS pension plan buy a 10.01 per cent stake in 407 International Inc., reducing SNC-Lavalin’s interest to 6.76 per cent.
SNC-Lavalin plans to use the proceeds from the 407 deal to bolster its balance sheet and help pay down a $1.5-billion loan from the Caisse, Quebec’s pension fund manager. The scandal-plagued company previously paid off $500 million of the 2017 loan, and aims to pay another $600 million upon closing.
Jarislowsky’s comments, posted in a personal note on the website of the Canadian Foundation for Advancement of Investor Rights, also take aim at former attorney general Jody Wilson-Raybould for refusing to overturn prosecutors’ decision to prosecute the company on fraud and corruption charges.