Jan 4 2011
Aecon Group Inc. (TSX:ARE) announced today that it has completed the previously disclosed sale of its 25% interest in the Cross Israel Highway concessionaire, Derech Eretz Highways (1997) Ltd. (DEC).
The $82.3 million sale to Shikun & Binui Holdings Ltd. (previously a 37.5% partner in the concession) and T.S.I. Roads Limited Partnership, a consortium headed by Israel Infrastructure Fund (the IIF consortium), was completed December 31, 2010. The sale will generate cash proceeds to Aecon of $65 - $70 million and an after tax gain of approximately $30 to $35 million.
In a related transaction, Africa Israel Investments Ltd. sold its 37.5% share of DEC to the IIF consortium. The end result of the two transactions is that Shikun & Binui Holdings Ltd. and the IIF consortium each now own 50% of DEC.
Excluded from the transaction are Aecon's interests in Derech Eretz Highways Management Corporation Limited, the operator of the Cross Israel Highway, in which Aecon holds a 30.6% interest, as well as Aecon's interests in several affiliates of the operator that operate other transportation infrastructure assets in Israel.
"We believe this transaction is an affirmation of the public/private partnership model for developing public infrastructure, a model that was pioneered in the development of the Cross Israel Highway," said John M. Beck, Aecon's Chairman and CEO. "The gains realized through this sale, which are in addition to the profits Aecon earned from its role in construction and operation of the highway, highlight the merits of our strategy of participating in such selected partnerships as both developer and contractor."
"I am grateful to our partners in DEC and to the State of Israel and its representatives, who made our participation in this very successful and innovative project possible," Mr. Beck said.
Source: http://www.aecon.com/