Brookfield Infrastructure's Reorganization Overview
BROOKFIELD, NEWS — Brookfield Infrastructure Partners L.P. (BIP) and Brookfield Infrastructure Corporation (BIPC) have announced their plans to undergo an important reorganization known as the 'Arrangement.' This move is designed to enhance the operational efficiency of Brookfield Infrastructure while aligning with updates to the Income Tax Act, which may impose additional costs on shareholders if left unaddressed.
Understanding BIPC's Formation
BIPC was established by the Partnership in 2020 to give investors access to a well-diversified global portfolio of high-quality infrastructure assets within a corporate framework. This structure allows shareholders to enjoy numerous benefits, including broader index inclusion, improved liquidity, a more varied investor base, and simplified tax reporting, ultimately leading to higher after-tax yields for particular shareholders.
Market Growth and Investor Base Expansion
Since the introduction of BIPC, Brookfield Infrastructure's market capitalization has increased significantly, soaring from $17 billion to a notable $29 billion. The average daily trading volume has also doubled, and the investor base has expanded by threefold. Notably, over 55% of the current investors are from the U.S. and other international markets, showcasing the corporation's appeal beyond Canada.
Benefits for Shareholders Post-Arrangement
Once the Arrangement is finalized, shareholders of BIPC can expect to retain ownership of a security equivalent to their current investments, ensuring they continue to reap the same economic benefits and governance rights. An additional appealing aspect is the anticipated tax-deferred status of this Arrangement for the majority of investors, both in Canada and the U.S.
Implementation Process and Expectations
This reorganization will be carried out under a court-approved plan, necessitating shareholder approval. A detailed management information circular is anticipated to be distributed to BIPC shareholders soon to inform them about the upcoming special virtual meeting scheduled for early December. Shareholders of record prior to a specific date will be eligible to vote on this significant transaction.
Recommendation from the Board
The BIPC Nominating and Governance Committee has unanimously endorsed the Arrangement. The Board of Directors has resolved to support the initiative, recommending that exchangeable shareholders approve the changes. The Board's decision was substantially informed by a fairness opinion from RBC Dominion Securities, outlining the financial implications and fairness for Public Holders of exchangeable shares.
Impact on Partnership Investors
Importantly, the reorganization will have no adverse effects on investors in the Partnership itself, who will not need to take any action regarding this Arrangement. This separation ensures that both BIPC shareholders and Partnership investors can navigate this change without interruption to their current investment strategies.
Additional Resources and Documentation
Detailed documentation related to the Arrangement—including the management information circular, related agreements, and the overall plan—will be made available to regulators and the public, ensuring transparency in the process. Investors can access these documents through appropriate Canadian and U.S. channels as the reorganization progresses.
About Brookfield Infrastructure
Brookfield Infrastructure stands as a premier global infrastructure entity dedicated to owning and managing high-quality, long-term assets across various sectors, such as utilities, transportation, midstream, and data infrastructures in regions ranging from the Americas to Asia Pacific and Europe. This company focuses on assets that provide regulated revenues, thus securing predictable revenue streams and sustainability.
Contact Information
Media Inquiries:
Simon Maine
Managing Director, Corporate Communications
Tel: +44 739 890 9278
Email: simon.maine@brookfield.com
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 purpose of the Brookfield Infrastructure reorganization?
The reorganization aims to enhance business structure while addressing potential tax implications from changes to the Income Tax Act.
How has Brookfield Infrastructure's market capitalization changed?
The market capitalization has grown significantly, increasing from $17 billion to $29 billion since BIPC's initial listing.
Will there be any impacts on current Partnership investors?
No, the Arrangement will not affect Partnership investors, who are not required to take any action.
What are the expected benefits for BIPC shareholders?
Shareholders will retain equivalent economic benefits, governance rights, and potentially enjoy tax-deferred status after the reorganization.
How will the reorganization be documented and communicated?
Key documents will be filed with regulatory bodies and made available for shareholders, ensuring transparency throughout the process.
