Brookfield Infra to raise $588m

Brookfield Asset Management is expecting to raise $588 million with a multimillion unit offering of its flagship publicly listed infrastructure fund – Brookfield Infrastructure Partners (BIP).

Initially, Brookfield sought to raise $500 million for BIP but the offering was increased “due to strong investor demand,” the Toronto asset manager said. Brookfield explained the sale will provide BIP with “additional liquidity” to fund its growth strategy. 

In particular, Brookfield will use $150 million from the fundraise to finance its recent purchase of two toll roads in Chile – Tunel San Cristobal and Vespucio Norte – from Spanish developer ACS. An additional $150 million will help finance its railroad asset in Australia with the rest of the proceeds to be used to repay debt.

“The equity issue will allow us to finance the completion of our near-term growth [effort],” said Sam Pollock, chief executive officer of BIP, adding: “This transaction will leave us with significant equity.”

Brookfield will also participate in the capital increase for BIP “in order to maintain its approximate 30 percent interest in BIP on a fully exchanged basis,” the asset manager said. 

It added that the offer’s underwriters have been granted an over-allotment option, exercisable within a month of the offer’s closing date (October 26), to buy additional units in BIP. If the over-allotment is subscribed to, Brookfield said it will also buy additional units to maintain its 30 percent stake in BIP.

In September, Brookfield announced its plan to recombine its renewable energy portfolio into a second publicly listed partnership which could top $13 billion. A unit-holder vote on that plan is pending.