Freehills is advising Babcock & Brown Infrastructure (BBI) on its $1.8 billion recapitalisation proposal involving a new cornerstone investor, Brookfield Asset Management Inc. (together with its affiliates) (Brookfield).
BBI’s Chairman David Hamill said, ‘ … Looking forward, the proposed Recapitalisation offers investors a secure, simple capital structure, internalised management and a renewed Board with access to the capabilities of a strong cornerstone investor. It will enable us to focus on the underlying businesses and move forward with confidence to deliver value for Securityholders.’
As BBI have announced, the recapitalisation involves:
- a $1.5 billion equity raising, including a $625 million placement to Brookfield, a fully underwritten $625 million institutional placement and a fully underwritten $250 million security purchase plan
- refinancing and restructuring of debt facilities, including the repayment of all existing corporate debt (excluding approximately $119 million of NZ corporate bonds)
- major asset transactions with Brookfield raising $295 million, including convertible notes that provide a 49.9 per cent economic interest in Dalrymple Bay Coal Terminal and the sale of PD Ports. Brookfield will also provide asset management services to the Australian Energy Transmission & Distribution and Cross Sound Cable assets and those assets will be held for sale
- simplification of BBI’s capital structure through the conversion of the Exchangeable Preference Shares (EPS)
- a $104 million capital distribution to existing stapled security holders
- provision of enough cash flow to allow, at the discretion of the Board, for the redemption of SPARCS, and
- internalisation of BBI’s management.
BBI will also change its name to Prime Infrastructure. General meetings of BBI’s securityholders will be held to consider resolutions relating to the transactions.
Freehills’ partner Philippa Stone said, ‘We are delighted to continue our long relationship with BBI by assisting them on a complex transaction of tremendous importance to BBI’s future.’
The Freehills team advising BBI was led by partners Philippa Stone and Tim McEwen and included:
- senior associates Faith Sing, Daniel Scotti and Ilan Kraus, and solicitors Malika Chandrasegaran, Sally Choi and Jeremy Chew on equity capital markets aspects
- partners Baden Furphy and Damien Hazard, senior associates Daniel Krutik and Sian Morris, and solicitors Fergus Smith, Lesley Yu, Stacia Super and Jamie Palmer on the asset transactions with Brookfield, and
- partners Erin Wakelin and Melita Cottrell, senior associates Marnie Fels, Bradburn Turner and Kate Cahill, and solicitor Fergus Smith on BBI’s refinancing and debt restructure and on finance aspects of the asset transactions.
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