Australian regulator approves Babcock Infrastructure recap

The Australian Foreign Investment Review Board has informed the firm that it has no objections to the proposed A$1.8bn recapitalisation of the debt-laden Australian infrastructure fund.

Brookfield Asset Management's proposed A$1.8 billion (€1.1 billion; $1.6 billion) recapitalisation of Babcock & Brown Infrastructure (BBI) edged one step closer toward becoming a reality after a key regulatory body in Australia gave its approval for the deal.

Sydney-listed BBI said in a statement that the Australian Foreign Investment Review Board has informed the firm that it has no objections to the proposed recapitalisation, which was made public on 8 October.

The review board is charged with examining proposals by foreign interests to make investments in Australia and makes recommendations to the Australian Government under its foreign investment policy.

As Brookfield is a Canadian firm based in Toronto, the review board?s sign-off is one of several governmental, regulatory, shareholder and transaction counterparty approvals needed to make the deal happen.

Financial close is expected to take place late next month if everything else proceeds smoothly.

Brookfield entities involved in the deal have been making the requisite moves to close on the deal. Last week, Brookfield Infrastructure Partners (BIP), the Brookfield-managed infrastructure fund that will be contributing equity toward the recapitalisation, filed a prospectus to issue an additional approximately $575 million in equity on the public markets.

The offering will be concurrent with a $375 million private placement of BIP shares with Brookfield Asset Management, according to the statement.