BIP.UN Brookfield Infrastructure Partners Lp

All dollar references are in U.S. dollars unless noted otherwise. 

Brookfield Infrastructure (NYSE:BIP)(TSX:BIP.UN) today announced that it has
agreed to issue approximately 14.1 million L.P. units, on a bought deal basis,
to a syndicate of underwriters at a price of $24.75 per L.P. unit (the "Offering
Price") for aggregate gross proceeds of $350 million (the "Offering"). In
addition, Brookfield Asset Management Inc. ("Brookfield") (NYSE/TSX/Euronext:
BAM) will purchase directly or indirectly 6.1 million redeemable partnership
units of Brookfield Infrastructure's holding limited partnership ("RPUs") at the
offering price (net of underwriting commissions) concurrent with the proposed
public offering in order to maintain its approximate 30% interest in Brookfield
Infrastructure on a fully exchanged basis. The aggregate gross proceeds of the
Offering and the placement to Brookfield will be approximately $500 million. The
Offering is expected to close on or about October 26, 2011.


Brookfield Infrastructure has granted the underwriters an over-allotment option,
exercisable in whole or in part for a period of 30 days following closing, to
purchase from it up to an additional 2.1 million L.P. units at the Offering
Price, which, if exercised, would increase the gross Offering size to $403
million. If the underwriters exercise the over-allotment option, Brookfield will
have the option to purchase additional RPUs in order to maintain its approximate
30% interest in Brookfield Infrastructure on a fully exchanged basis. 


The Offering will provide Brookfield Infrastructure with additional liquidity to
fund its growth strategy. Proceeds of approximately $150 million will be used to
acquire interests in two Chilean toll roads and proceeds of approximately $150
million will be used to fund growth capital expenditures at Brookfield
Infrastructure's Australian railroad. The remaining proceeds will be used to pay
down the corporate credit facility, which has been drawn over the past nine
months to invest in Brookfield Infrastructure's Australian railroad and other
organic growth initiatives.


"This equity issue will allow us to finance the completion of our near term
growth initiatives," said Sam Pollock, Chief Executive Officer of Brookfield's
Infrastructure Group. "Over the past few years, we have demonstrated our
commitment to growing our business in a measured and opportunistic manner. This
transaction leaves us with significant liquidity at an opportune time to pursue
new investment initiatives." 


Chilean Toll Road Acquisitions

A Brookfield consortium recently committed to acquire a controlling interest in
two operating Chilean toll roads in a transaction with an equity investment and
proportionate enterprise value of approximately $340 million and $760 million,
respectively. Autopista Vespucio Norte ("AVN") is a 29 kilometre free-flow toll
road concession that expires in 2033 and forms part of the Santiago ring road.
Tunel San Cristobal is a 4 kilometre free-flow toll road concession that expires
in 2037 that connects to the eastern entrance point of AVN. Upon completion of
the acquisition and all related transactions, Brookfield Infrastructure will
invest approximately $150 million to acquire 24% of the two toll roads. 


"With the acquisition of these toll roads, we will establish a new operating
platform within our transport and energy business in a country we know well,"
said Mr. Pollock. "We believe these toll roads are high quality infrastructure
investments that will generate substantial growth in cash flows due to their
strategic location and the favourable economic prospects for the country of
Chile." 


These toll roads are key arteries in Santiago's urban roadway network with
significant excess capacity. We expect them to generate stable cash flows that
should increase with traffic growth and a tolling regime that permits annual
tariff indexation of Chilean CPI + 3.5% per year. The revenue framework also
allows the operator to charge congestion tariffs, whereby tolls can be increased
during high volume periods. This investment is expected to generate a levered,
after-tax total return on equity of 12-15%, in line with Brookfield
Infrastructure's target returns for this segment. Closing of this transaction is
expected in the fourth quarter upon the receipt of third-party consents.


Australian Railroad Expansion

As previously disclosed, Brookfield Infrastructure is in the process of
expanding and upgrading its Australian railroad to serve its customers' growth
objectives. This expansion will serve a diverse group of new mines, mine
expansions and industrial projects for new and existing customers. Brookfield
Infrastructure is currently developing and constructing six projects that are
expected to account for a 45% increase in volumes on its railroad upon
completion.


During the third quarter of 2011, Brookfield Infrastructure signed its fourth
long-term commercial track access agreement ("CTAA") relating to these expansion
projects. This 10-year contract for the Worsley alumina expansion covers
existing tonnage plus an additional 2.0 million tonnes per year. Brookfield
Infrastructure has also agreed to all major commercial terms with its customers
for the remaining two projects and documentation of these CTAAs is expected to
be finalized shortly. 


"With the signing of the Worsley contract, we have fully contracted
approximately 78% of minimum take or pay revenues anticipated from these growth
projects, and we remain focused on ensuring we deliver the associated upgrades
on time and on budget," said Mr. Pollock. "We expect to generate attractive
returns on this incremental capital, reflecting the significant historical
investment that has been made in our rail system." 


The remaining capital costs for this expansion and network upgrade program are
forecast to be approximately A$500 million. Approximately $150 million of equity
is required for this project and will be funded from the proceeds of the
Offering. 


Offer Documents

Brookfield Infrastructure has filed a registration statement (including a
prospectus) with the SEC in respect of the Offering. Before you invest, you
should read the prospectus in that registration statement and other documents
Brookfield Infrastructure has filed with the SEC for more complete information
about Brookfield Infrastructure and the Offering. Brookfield Infrastructure has
also filed the prospectus relating to the Offering with certain provincial
securities regulatory authorities in Canada. You may get any of these documents
for free by visiting EDGAR on the SEC website at www.sec.gov or via SEDAR at
www.sedar.com. Also, a copy of the United States preliminary prospectus
supplement may be obtained through this hyperlink:
http://www.brookfieldinfrastructure.com/_Global/22/img/content/file/US-Prospectus-Supplement.pdf.
Alternatively, Brookfield Infrastructure, any underwriter or any dealer
participating in the Offering will arrange to send you the prospectus if you
request it in the U.S. from RBC Capital Markets, toll-free 877-822-4089, Credit
Suisse, toll-free at 800-221-1037, Citigroup, toll-free at 877-858-5407 or HSBC,
toll-free at 866-811-8049, or in Canada from RBC Capital Markets, Attention:
Distribution Centre, 277 Front St. W., 5th Floor Toronto, Ontario M5V 2X4 (fax:
416-313-6066) (no toll free number).


Brookfield Infrastructure operates high quality, long-life assets that generate
stable cash flows, require relatively minimal maintenance capital expenditures
and, by virtue of barriers to entry and other characteristics, tend to
appreciate in value over time. Its current business consists of the ownership
and operation of premier utilities, transport and energy, and timber assets in
North and South America, Australasia, and Europe. Units trade on the New York
and Toronto Stock Exchanges under the symbols BIP and BIP.UN, respectively. For
more information, please visit Brookfield Infrastructure's website at
www.brookfieldinfrastructure.com.


This news release does not constitute an offer to sell or a solicitation of an
offer to buy any securities of Brookfield Infrastructure in any jurisdiction in
which such offer, solicitation or sale would be unlawful. 


Note: This news release contains forward-looking information within the meaning
of Canadian provincial securities laws and "forward-looking statements" within
the meaning of Section 27A of the U.S. Securities Act of 1933, as amended,
Section 21E of the U.S. Securities Exchange Act of 1934, as amended, "safe
harbor" provisions of the United States Private Securities Litigation Reform Act
of 1995 and in any applicable Canadian securities regulations. Forward-looking
statements in this news release include statements regarding the offering of
limited partnership units. The words "anticipated", "intends", "will",
"expected", "tend", "seeks" and other expressions which are predictions of or
indicate future events, trends or prospects and which do not relate to
historical matters identify the above mentioned and other forward-looking
statements. Although Brookfield Infrastructure believes that these
forward-looking statements and information are based upon reasonable assumptions
and expectations, the reader should not place undue reliance on them, or any
other forward looking statements or information in this news release. The future
performance and prospects of Brookfield Infrastructure are subject to a number
of known and unknown risks and uncertainties. 

Factors that could cause actual results of Brookfield Infrastructure to differ
materially from those contemplated or implied by the statements in this news
release include general economic conditions in Australia, Chile, Canada, the
United States and elsewhere; the ability to effectively complete new
acquisitions in the competitive infrastructure space (including, without
limitation, the ability to complete the acquisition of the interests in the
Chilean toll roads discussed herein) and to integrate acquisitions into existing
operations; foreign currency risk; the high level of government regulation
affecting the business of Brookfield Infrastructure, including, without
limitation, in respect of the toll road acquisitions and railroad operations
discussed herein; the fact that the success of Brookfield Infrastructure is
dependent on market demand for an infrastructure company, which is unknown; the
availability of equity and debt financing for Brookfield Infrastructure; the
completion of various large capital projects by mining customers of Brookfield
Infrastructure's railroad business, which themselves rely on access to capital
and continued favorable commodity prices; construction risks relating to
Brookfield Infrastructure's Australian railroad operations (including, without
limitation, risks relating to the occurrence of non-budgeted costs, construction
delays and disruption of operations); traffic volumes on the Chilean toll roads
discussed herein; acts of God or similar events outside of our control; and
other risks and factors described in the documents filed by Brookfield
Infrastructure with the securities regulators in Canada and the United States
including under "Risk Factors" in Brookfield Infrastructure's annual report on
Form 20-F and other risks and factors that are described in the annual report.
Except as required by law, Brookfield Infrastructure undertakes no obligation to
publicly update or revise any forward-looking statements or information, whether
as a result of new information, future events or otherwise.

Brookfield Infrastructur... (TSX:BIP.UN)
Historical Stock Chart
From Oct 2024 to Nov 2024

Brookfield Infrastructur... (TSX:BIP.UN)
Historical Stock Chart
From Nov 2023 to Nov 2024