Brookfield sells Transelect stake to China Southern Power Grid

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By Ted Liu

Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN) has agreed to sell its approximate 27.8% interest in ETC Transmission Holdings, S.L., the parent company of Transelec S.A., to China Southern Power Grid International (HK) Co., Ltd. for US $1.3 billion.

In June 2006, Brookfield Asset Management Inc., Canada Pension Plan Investment Board (CPPIB), British Columbia Investment Management Corporation (bcIMC) and Public Sector Pension Investment Board (PSP Investments), acquired HQI Transelec Chile S.A. from Hydro-Quebec International Inc. for over US $1.55 billion.

“Over the past year we have been focused on executing the next phase of our capital recycling program, seeking to dispose of mature infrastructure assets and to redeploy the proceeds in higher-returning opportunities,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure. “Proceeds from the sale of Transelec will be used to fund our growing backlog of organic growth projects, as well as our robust pipeline of transactions.”

Transelec is the largest pure-play power transmission company in Chile, with over 10,000 kilometers of electricity lines serving approximately 98% of the Chilean population.

Subject to customary closing conditions, certain third-party consents and applicable regulatory approvals from relevant authorities in China and the transaction is expected to close in the first half of 2018.

Santander GCB and Scotiabank are acting as financial advisors to Brookfield Infrastructure and Goodmans LLP is acting as legal advisor.

Brookfield Infrastructure Partners is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, energy and communications infrastructure sectors across North and South America, Asia Pacific and Europe.

Guangzhou based China Southern Power Grid Co., Ltd. invests in, constructs and operates power networks in Guangdong, Guangxi, Yunnan, Guizhou and Hainan provinces, with a total service area of 1 million square kilometers and 230 million people.

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