Brookfield Infrastructure Announces Strategic Reorganization
BROOKFIELD, NEWS — Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN) and Brookfield Infrastructure Corporation (TSX, NYSE: BIPC) have unveiled an ambitious reorganization aimed at preserving the advantages of their established business model while adapting to impending changes in tax regulations.
Purpose of the Reorganization
The reorganization, known as the Arrangement, is designed to tackle anticipated modifications to the Income Tax Act (Canada) that could generate additional financial burdens for BIPC if proactive measures are not implemented. It is a crucial step in aligning Brookfield Infrastructure with the evolving market and regulatory landscape.
The Role of Brookfield Infrastructure Corporation
Created in 2020, Brookfield Infrastructure Corporation serves as a bridge for investors seeking access to the expansive, globally diversified portfolio curated by the Partnership. The structure offers various benefits, such as greater index inclusion, enhanced liquidity in trading, and a simplified framework for tax reporting.
Growth in Market Presence
Since its inception, Brookfield Infrastructure has witnessed impressive growth, with its market capitalization climbing from $17 billion to an impressive $29 billion. Their trading volume has also increased, doubling over time. A significant shift has occurred in their investor base, now including over 55% U.S. and non-Canadian investors, reflecting the diverse and global interest in their offerings.
Details of the Arrangement
Under the Arrangement, BIPC shareholders will gain a security that mirrors the economic benefits and governance structure present in their current investment. The majority of investors, including those in Canada and the U.S., can anticipate a tax-deferred status from this transition.
Implementation Process
The Arrangement will be executed through a court-approved plan that mandates the consent of shareholders. Essential details will be outlined in a management information circular that will be distributed to BIPC shareholders in late October. A special virtual meeting is slated for December, where shareholders will be able to voice their approval of the proposed changes. Those on record as of a specified date will have the right to vote.
Leadership Endorsement of the Restructuring
The BIPC Nominating and Governance Committee has expressed strong support for the Arrangement, deeming it beneficial for the corporation. Following this, the Board unanimously resolved to recommend that exchangeable share holders endorse the reorganization plan. The fairness of the considerations for Public Holders, as per an assessment by RBC Dominion Securities Inc., adds a layer of assurance regarding financial equity in the transaction.
No Disruption for Existing Investors
For the Partnership’s existing investors, this restructuring will not pose any detriment. They are not required to approve nor take further action concerning the Arrangement.
Accessing More Information
Comprehensive documentation related to the management circular, arrangement agreement, and supporting documents will be accessible via Canadian securities regulators and the United States Securities and Exchange Commission. These crucial materials will provide stakeholders with insights into the details of the Arrangement.
About Brookfield Infrastructure
Brookfield Infrastructure stands out as a premier global infrastructure corporation, managing an extensive array of long-life assets across utilities, transportation, midstream, and data sectors worldwide. The focus on regulated revenues assures stable cash flows for investors. Options to invest include Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN) or the corporate structure of Brookfield Infrastructure Corporation (NYSE, TSX: BIPC).
Contact Information
For Media Inquiries:
Simon Maine
Managing Director
Corporate Communications
Tel: +44 739 890 9278
Email: simon.maine@brookfield.com
For Investor Relations:
Stephen Fukuda
Senior Vice President
Corporate Development & Investor Relations
Tel: +1 416 956 5129
Email: stephen.fukuda@brookfield.com
Frequently Asked Questions
What is the primary goal of the Brookfield reorganization?
The reorganization aims to adapt to changes in tax regulations while maintaining the structural advantages that benefit investors.
How has Brookfield Infrastructure's market presence changed?
Since the creation of BIPC, Brookfield has seen its market capitalization grow significantly, and its investor base has diversified.
Will existing shareholders be impacted by the reorganization?
No, existing investors in the Partnership will not be impacted and are not required to approve the reorganization.
When is the virtual meeting for shareholders scheduled?
The special virtual meeting for shareholders is set for December at 8:00 a.m. Eastern time.
Where can investors find more information about the Arrangement?
Investors can find detailed information in the management information circular and other documents available through securities regulators.
