OTTAWA (dpa-AFX) - Brookfield Infrastructure (BIP, BIP_UN.TO), along with institutional clients of Brookfield Asset Management (BAM, BAMA.TO), including CIC Capital Corp., GIC Private Limited and others announced that they have reached agreement to acquire a 90% controlling stake in Nova Transportadora do Sudeste S.A. for approximately $5.2 billion.
Nova is a system of natural gas transmission assets in the southeast of Brazil currently owned by Petroleo Brasileiro S.A.or Petrobras.
Brookfield managed entities will hold a controlling interest in the Consortium. Brookfield Infrastructure's investment will be a minimum of approximately 20% of the transaction, representing approximately $825 million of the transaction consideration payable on closing.
The remainder will be owned by institutional partners. Petrobras, as a 10% owner in NTS, will have customary governance rights commensurate with the size of its interest.
Under the terms of the transaction, the purchase price is payable in two tranches an up-front payment of $4.3 billion due on closing of the transaction, and the balance payable on the fifth anniversary of this closing.
Brookfield Infrastructure will fund its proportionate share of the up-front payment from existing liquidity.
As part of the transaction, Brookfield Asset Management has agreed to participate initially for an approximate 30% interest in the Consortium. Brookfield Asset Management expects to syndicate its holdings prior to closing of the transaction and Brookfield Infrastructure has priority rights to take up a portion of this syndication.
Initially, the pipelines will be operated by a subsidiary of Petrobras under a multi-year operations and maintenance contract. Over time, Brookfield Infrastructure will have the flexibility to transition NTS to a fully stand-alone operating business and internalize all management and operating functions, if desired.
Closing of the transaction remains subject to a number of conditions, and is targeted for December 2016 or as soon as possible thereafter.
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