09/04/2013 03:44 EDT | Updated 11/04/2013 05:12 EST

SNC sells 66% of its minority interest in NYC gas-fired power plant

MONTREAL - SNC-Lavalin is selling 66 per cent of its minority interest in Astoria Project Partners II LLC, which owns and operates the gas-fired Astoria II power plant in New York City.

Financial terms of the deal have not been disclosed.

The Quebec-based engineering giant said the move is part of a strategic plan announced last May for the company to focus on the resources sector, including oil and gas, mining and metallurgy and environment and water.

"The agreement to sell a part of its minority interest in Astoria II is in line with the company's strategic plan to monetize a portion of its mature infrastructure concession investments, also announced at the AGM," it said in a release Wednesday.

SNC-Lavalin (TSX:SNC) and its partners began construction of the Astoria II 575-MW thermal energy facility in July 2008.

"From overseeing financial close and construction, to several years of successful operation, SNC-Lavalin has now come full circle with Astoria II," acting executive vice-president Gerry Grigoropoulos said in a statement.

SNC-Lavalin injected US$70 million into Astoria II in 2009 for a 20 per cent equity interest, while also providing engineering, procurement and construction services to build the plant.

"This sale would provide a good return on our monetized investment and represents the creation of value by selling certain investments when strategically and financially appropriate, and in rebalancing our portfolio of infrastructure concessions," said Grigoropoulos.

Maxim Sytchev of Dundee Securities said the Astoria sale is "just the beginning" of SNC-Lavalin's efforts to extract shareholder value by selling some of its concessions holdings. The company has indicated it was seeking to exit investments in Astoria I, II and the Malta airport.

"While we are very pleased to see that the company is monetizing some of the concession investments, the value creation opportunity lies with AltaLink," he wrote in a report, referring to the power transmission operations in Alberta that are estimated to be worth between $7 and more than $10 per SNC share.

SNC-Lavalin's concessions portfolio includes the Highway 407 toll road near Toronto, a Montreal superhospital being built and the Montreal symphony hall.

The company is one of the leading engineering and construction groups in the world and is currently active in some 100 countries.

On the Toronto Stock Exchange, its shares closed up 73 cents, or 1.83 per cent, at $40.59 on Wednesday.