TORONTO—Brookfield Asset Management Inc. and Brookfield Renewable Power Fund plan to combine their power generating facilities into one of the world’s largest renewable power businesses with some US$13 billion of assets.
The deal would combine the assets of the fund with Brookfield Asset’s wholly owned subsidiary, Brookfield Renewable Power Inc., to create a new entity call Brookfield Renewable Energy Partners L.P..
It would be a global, publicly-traded partnership focused on renewable power generation, primarily hydroelectric, in Canada, the US and Brazil.
Richard Legault, CEO of Brookfield’s power operations, said the new company would “rank among the very best renewable businesses globally in terms of its quality of assets, scale of operating platform, geographic diversification, access to capital, and global reach.”
“We intend to utilize this entity to grow in the renewable energy business globally,” Legault said.
Under terms of the deal, fund unit holders—whose approval is necessary—would receive one limited partnership unit of Brookfield Renewable Energy Partners for every fund unit held.
Subject to security holder approvals, subsidiaries of BREP will be responsible for all obligations related to approximately C$1.1 billion of unsecured public corporate bonds issued by Brookfield Power, and C$250 million of preferred shares, with BREP providing guarantees.
The transaction, expected to close in the fourth quarter, will require approval by two-thirds of fund unitholders and a majority of unitholders other than Brookfield and related persons. In addition, Brookfield will seek approval from two thirds of the holders of preferred shares and Brookfield Power’s unsecured bondholders.
Brookfield Renewable Power Fund is one of the largest power income funds in North America with more than 1,700 megawatts of power generating capacity, including 42 high hydroelectric generating stations and two wind farms in Quebec, Ontario, British Columbia and New England.
Brookfield Renewable Power Inc., which comprises most of the power operations of Brookfield Asset Management Inc., owns approximately 34 per cent of the fund’s outstanding units on a fully exchanged basis.
Brookfield Renewable Power Inc., wholly-owned by Brookfield Asset Management Inc., has a portfolio of more than 170 generating facilities with approximately 4,400 megawatts of capacity, which operations primarily located in North America and Brazil.
Brookfield Asset Management Inc. is a global alternative asset manager with approximately $150 billion in assets under management with a focus on real estate, infrastructure, power and private equity.