Excerpts from the following press...

Excerpts from the following press release.

http://www.brookfield.com/content/2009_press_releases/brookfield_asset_management_and_brookfield_infrast-1800.html

Brookfield Infrastructure intends to raise equity to fund its interest in the transaction and Brookfield Asset Management will subscribe for its pro rata share of any equity raised by Brookfield Infrastructure, subject to Brookfield Infrastructure unitholder approval. A meeting of Brookfield Infrastructure’s unitholders will be called shortly to approve the participation of Brookfield Asset Management in any Brookfield Infrastructure offering above a specified threshold as required under Canadian securities laws. Brookfield Asset Management will acquire any portion of the investment which Brookfield Infrastructure does not acquire.

“This is a unique opportunity for Brookfield to invest in high quality, core infrastructure assets,” said Mr. Pollock. “Due to the contractual and regulated nature of their revenues, BBI’s portfolio of market leading infrastructure businesses tend to be resilient in economic downturns and are expected to generate consistent cash flows for shareholders now that we’ve addressed BBI’s capital structure issues.”

“We are very pleased to be working together with Brookfield to restructure and recapitalize BBI and position it for renewed growth. Brookfield’s comprehensive recapitalization proposal has the full support of our management team and the BBI Board and we believe it is the best alternative available to BBI’s securityholders for restoring our balance sheet and building on our significant strengths for the future,” said Dr. David Hamill, Chairman of Babcock & Brown Infrastructure.

BBI’s expected approximate ownership structure and indicative capitalization following the Recapitalization3 is set out in the table below:
Equity and Ownership Under Transaction (A$millions)

Ownership3
Brookfield $625 - 713 35-40%4
Institutional
investors 625 35%
SPP subscribers
(ex-Brookfield) 62 - 250 9-14%4
Securityholders
(including converted
EPS holders) 286 16%
Totals $1,786 100%

Brookfield Asset Management has also agreed to provide management services for a fee to both AET&D and CSC and will have the right to acquire BBI’s interests in these assets on certain defined terms.

Once recapitalized, BBI will have a more sustainable capital structure and own premier infrastructure assets that generate stable and predictable cash flows. The Recapitalization has been designed to reduce debt leverage5 to long-term sustainable levels at both the corporate and asset levels. The A$1.8 billion of cash proceeds from BBI’s equity raising and asset sales will allow repayment of BBI’s corporate debt outstanding6, remove material near-term debt maturities and increase liquidity. Following completion of the Recapitalization, pro forma proportional debt leverage is expected to decrease to approximately 68%. BBI will establish a three-year A$300 million corporate borrowing facility, which is expected to be undrawn upon completion of the Recapitalization, providing BBI with additional liquidity.


Brookfield’s Investment
Brookfield will own 35% - 40% of a recapitalized BBI, which will be a global infrastructure company traded on the Australian Securities Exchange focused on the transport, energy infrastructure and utilities sectors with approximately A$5.5 billion (US$5 billion) of total assets. BBI’s portfolio of world class infrastructure assets will be diversified across asset classes, geographies and regulatory regimes. Prime Infrastructure will own:

Energy Infrastructure and Utilities

* A 26% interest in Natural Gas Pipeline Company of America (“NGPL”): one of the largest natural gas transmission pipelines and storage systems in the U.S.
* A 42% interest in Powerco: New Zealand’s second-largest electricity and gas distributor.
* A 100% interest in International Energy Group (“IEG”): a UK-based independent utility connections provider and gas distributor in the Channel Islands.
* A 100% interest in Tasmanian Gas Network (“Tas Gas”): a gas distribution network in Tasmania.

Transportation

* A 100% interest in WestNet Rail: a rail infrastructure and access provider with over 5,100 kilometres of rail infrastructure in Western Australia.
* A 50.1% interest in DBCT: currently the world’s largest coal export terminal.
* A 60% interest in Euroports: a portfolio of port concessions in strategic locations in Europe and China.

On a direct basis, Brookfield will also acquire approximately US$1.5 billion in assets including the 49.9% economic interest in DBCT as well as 100% of PD Ports, a “landlord” port which is the third largest port by tonnage in the UK. Furthermore, Brookfield Asset Management will manage the AET&D and CSC assets which, in aggregate, approximate US$1.5 billion in assets.


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