Brookfield Renewable Partners is creating a new publicly-listed Canadian corporation via a stock split as it seeks to broaden its investor base.
Following the procedure, investors will be able to invest in Brookfield Renewable either through the existing limited partnership (BEP) or the new Canadian corporation, to be called Brookfield Renewable Corp. (BEPC).
The shares of BEPC will be listed on the same exchanges as those of BEP, namely the New York Stock Exchange and Toronto Stock Exchange, according to Brookfield’s third quarter earnings report.
RBC Capital Markets is acting as financial adviser to Brookfield on the transaction, while Torys is providing legal counsel.
“As our business continues to grow and globalize, we are seeing increased demand from prospective investors,” said Sachin Shah, Brookfield managing partner and CEO of BEP, in a letter to shareholders. “We believe this initiative should support the expansion of our investor base by attracting new investors that are currently unable or unwilling to invest in our LP structure due to tax reporting or other attributes, and will allow us to be eligible for certain indices or ETFs that the BEP LP units are not.”
The procedure mirrors a similar process underway at Brookfield Infrastructure Partners.
The new BEPC common stock will be issued as a special distribution to BEP's existing common shareholders and will be economically equivalent to the L.P. units, paying identical dividends and distributions. BEP will hold on to all of two additional classes of BEPC stock, classes 'B' and 'C'.
Brookfield expects to complete the distribution in the first half of 2020, subject to regulatory approvals. The company filed a registration statement with the U.S. Securities and Exchange Commission on Nov. 8, and a preliminary prospectus will be filed with the securities regulators in Canada.