Brookfield Infrastructure Partners (BIP), a publicly-listed fund of Brookfield Asset Management (BAM), plans to increase the size of a previously announced equity offering from 8.9 million to 12 million limited partners units in order to meet “strong investor demand.”
At $45 a share, the gross proceeds of the equity offering will amount to $540 million. BAM, along with some of its related entities, will also purchase 8,101,850 redeemable partnership units (RPUs) of Brookfield Infrastructure’s holding limited partnership at the offering price, which will bring the aggregate proceeds to $890 million.
In addition, underwriters of the offering, co-led by RBC Capital Markets, Credit Suisse, HSBC and TD Securities, have been granted 30 days once the offering closes to purchase an additional 1.8 million units. If the over-allotment option is exercised in full that would increase the gross offering size to $971 million.
Brookfield Infrastructure intends to use the proceeds for investment opportunities, working capital and other general corporate purposes, including paying down amounts outstanding under its revolving credit facilities.
The firm did not disclose specific opportunities it would be targeting but a spokesperson referred Infrastructure Investor to comments made by Brookfield Infrastructure chief executive Sam Pollock in a letter addressed to unitholders when the company announced its 2014 fourth-quarter earnings.
In the letter, Pollock cited a number of areas Brookfield Infrastructure would strive to monitor closely in 2015. These included government privatisations, particularly in Australia; Brazilian construction companies selling off infrastructure assets as they face financial challenges; European utilities looking to divest assets; potential investments in the midstream sector as exploration and production companies deal with low oil prices; and infrastructure funds that are approaching their expiration date.
“We will remain disciplined throughout this period and target acquisitions that will provide Brookfield Infrastructure with the best risk-adjusted returns,” Pollock said, noting that 2015 “is shaping up to be potentially one of the most active periods for infrastructure investors.”
BIP did not indicate what portion of the proceeds from the equity offering would go towards outstanding debt.
Listed on the New York and Toronto stock exchanges, BIP owns and operates utilities, transport, and energy assets worldwide.
In addition to infrastructure, BAM also focuses on property, renewable power, and private equity. It has more than $200 billion in assets under management.