CVTech completes sale of its systems division for $17.3 million, will repay debt

DRUMMONDVILLE, Qc – CVTech Group Inc. (TSX: CVT) said Tuesday it has completed its sale of its systems and related products business for $17.3 million.

The Quebec-based maintenance and construction services company said the operations were sold to a group including two current managers as well as Fondaction, the CSN’s investment fund.

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The purchase price of $17.3 million was lower than the original price of $18 million, reflecting the lower value of underlying assets mainly due to the recent sale of a building and a reduction in working capital items being sold.

The price includes $15.3 million in cash and $2 million in preferred shares of the new company.

CVTech, which provides maintenance of power transmission and distribution lines, primarily in Quebec, Ontario and the eastern United States, said it intends to use the proceeds to reduce its debt.

The company formed a special committee earlier this year to review its strategic and financial alternatives, but said in August that it had been dissolved after having decided shareholders are best served by CVTech current business plan.