Brookfield Infrastructure Partners LP plans to create a Canadian corporation through a transaction similar to a unit split, the partnership announced Sept. 25.
The board of directors intends to distribute to existing Brookfield Infrastructure unit holders the class A shares of the new corporation, which is called Brookfield Infrastructure Corp., or BIPC.
"We expect BIPC, as a corporation, will be eligible for inclusion in several indices and offer a tax reporting framework that will appeal to investors in certain jurisdictions," Brookfield Infrastructure CEO Sam Pollock said in a company news release. "This positions us well to attract new investors to our leading infrastructure business."
The transaction will not result in any underlying change to aggregate cash flows or net asset value, with the exception of adjustment in the number of units or shares outstanding. The Class A shares are intended to provide investors the ability to own the equivalent economic exposure to Brookfield Infrastructure, including distributions, but in a traditional corporate structure.
Unit holders may receive 0.11 share of BIPC shares for each unit held of the partnership in the form of special distribution. Preferred limited partnership unit holders of Brookfield Infrastructure will not receive the class A shares.
After the special distribution is completed, quarterly distributions and dividends from Brookfield Infrastructure and BIPC will correspond to quarterly distributions made on Brookfield Infrastructure units.
RBC Capital Markets acted as financial advisers and Torys LLP as legal advisers to Brookfield Infrastructure for the transaction.
After the effective split, most BIPC class A shares will be held by Brookfield Infrastructure unit holders. Brookfield Infrastructure will own all the BIPC class B and C shares.
Brookfield Asset Management Inc. is expected to own about 29.6% of the BIPC class A shares, equivalent to its owned Brookfield Infrastructure units.
BIPC plans to list its class A shares on the New York Stock Exchange and Toronto Stock Exchange. Brookfield Infrastructure intends to complete the special distribution in the first half of 2020.
