Brookfield Infrastructure Partners is planning to create a Canadian corporation in order to provide investors with greater flexibility in how they access BIP’s globally diversified portfolio of high-quality infrastructure assets.
The firm believes that BIPC will enhance demand from U.S. retail investors due to more favorable tax attributes and increase demand from institutional investors who are currently unable to own partnership units.
Brookfield Infrastructure’s board of directors intends to distribute to existing unitholders class A shares of the new corporation, Brookfield Infrastructure Corporation (BIPC). Unitholders are expected to receive 0.11 BIPC shares for each unit held of Brookfield Infrastructure in the form of a special distribution. Brookfield said the class A shares are intended to allow investors the ability to own the equivalent economic exposure to BIP, including identical distributions, through a traditional corporate structure.
“The effective stock split and creation of BIPC will provide increased opportunities for investors to access our globally diversified portfolio of high-quality infrastructure assets,” said Sam Pollock, CEO of Brookfield Infrastructure. “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. This positions us well to attract new investors to our leading infrastructure business.”
Following the split, the majority of the class A shares will be held by the holders of Brookfield Infrastructure’s units, while Brookfield Infrastructure will own all the class B and C shares. The class A and class B shares will control 25 percent and 75 percent, respectively, of the aggregate voting rights of the shares of the new company.
Brookfield Asset Management is expected to hold approximately 29.6 percent of the class A shares, equivalent to its ownership of Brookfield Infrastructure units. BIPC intends to apply to list its class A shares in the United States on the NYSE and in Canada on the TSX.
Brookfield Infrastructure anticipates completing the special distribution in the first half of 2020, subject to normal regulatory approvals.
