G&W: New Details Revealed In Brookfield Investor Call

Brookfield Infrastructure Partners (BIP) CEO Discusses G&W Acquisition During Q2 Earnings Call. Australian Operation to be Sold Off; North American Network to Grow.

02 August, Toronto ON – BIP’s Q2 Earnings Call with analysts revealed some interesting details on the progress and prospects of the G&W acquisition, which BIP is leading with other investment institutions. CEO Sam Pollock headlined the call.

Down Under Sell-off

The biggest news is the sale of G&W’s extensive Australian assets to its current minority (49%) partner Macquarie Infrastructure and Real Estate Assets. The operations account for approximately 10% of G&W’s global income. In the call, Pollock said that the Australia sale was already determined when the G&W-BIP transaction was reported by ANRP on 30 June.

Responding to questions from Devin Dodge of BMO Capital Markets, Pollock implied that BIP will not be drawing-out the proceeds of the Australia sale, and that the remaining network will be ready with funds to take advantage of tuck-in opportunities. Pollock also added that G&W is open to assimilating Class I PSR techniques in order to share operational benefits {BIP Q2 2019 Results Earnings Call Transcript, Seeking Alpha , 02.Aug.19}

Control exemption delayed

On 22 July, the STB ruled to delay the granting to BIP of an exemption from prior approval requirements specified in 49 C.F.R. § 1180.2(d)(2). An exemption would allow BIP to take control of all of G&W’s 106 U.S. assets immediately upon the completion of the sale, expected to close in late 2019. BIP filed a Verified Notice of Exemption on 9 July. The STB’s ruling delays the effection of the exemption until the Board can study the matter more closely, and order a further order. The decision opens the exemption proceedings to public comments (due 21 August; replies due 05 September. Among the additional information the Board wants in order to consider the exemption are an expected review of the transaction by the federal Committee on Foreign Investment in the United States {STB Decision, Docket FD_36326, 22.July.19}

Last operational glimpse of G&W

On 09 August, G&W will file its last quarterly statement reflecting performance through the end of June, when its public corporation status was declared ended. There will be no conference call.