Several week delay for ETR 407 toll road sale

Spanish infrastructure group Ferrovial has revealed that the sale of a 10% stake in Canada’s 407 ETR toll road by its Cintra subsidiary will be delayed for several weeks. The sale has been held back following a recent takeover bid for Intoll, which is Ferrovial’s partner in the 407 ETR.

Following the announcement of its half-yearly results, Spanish infrastructure group Ferrovial announced that the sale of a 10 percent stake in Canada’s 407 ETR toll road by its Cintra subsidiary would be delayed for several weeks.

The delay results from the A$5 billion bid for Intoll, the Australian toll road operator, by the Canada Pension Plan Investment Board, which was announced in mid-July. Intoll is Ferrovial’s partner in the 407 ETR.

Ferrovial announced the sale in March this year and originally said it wanted binding offers by July 20.

The sale would reduce Cintra’s position in the road to 43.23 percent with analysts saying Ferrovial should have no problem getting the €500 million it is said to be seeking for the stake.

Media reports say that SNC Lavalin, which currently owns 16.77 percent of the Canadian toll road, is looking into buying Cintra’s stake. RBC Capital Markets is Cintra’s financial adviser on the sale.

If it were to go ahead with the deal, SNC Lavalin would acquire a share roughly equal to Intoll’s 30 percent stake in the 407 ETR.

Ferrovial chief executive Iñigo Meirás said the company plans to use the proceeds from the stake sale to pay down debt and fund new toll road projects. Ferrovial’s debt stood at €22 billion as of September 2009.

The 407 ETR is a star performer in the Ferrovial portfolio. In its half-yearly results, which were announced at the end of July, the company said the 407 ETR “stood out”, with traffic increasing six percent during the period.