French infrastructure investor Ardian has joined forces with local fund manager CMB Prime to acquire an indirect 33% stake in two of Brookfield’s Chilean highways, according to a 6 September press release.
Through Ardian Americas Infrastructure Fund IV and Fondo de Inversion CMB-LV Infraestructura III, the acquirers are buying 3.02 million shares, or 33%, in holding company Brookfield Americas Infrastructure Holdings Chile I (BAIH Chile) from the Brookfield Americas Infrastructure Fund, according to a 6 September CMB stock exchange filing.
Both funds will contribute 50% of the capital for the acquisition but will not make use of acquisition financing, spokespeople for the funds confirmed.
BAIH Chile indirectly owns 100% of the 29km (18.02 miles) Vespucio Norte Express highway and the 4km San Cristóbal tunnel concessions, both of which are urban toll roads in the Chilean capital Santiago. The remaining concession life of these two assets is 14 and 18 years, respectively.
The acquirers said that pending regulatory approvals they expect to close the all-equity transaction in mid-October.
The buyers declined to provide a value for the transaction, but in a February 2019 transaction, local infrastructure funds administered by Banchile and FrontalTrust acquired a 33% stake in the BAIH Chile holdco for USD 330m.
In March, the previous owners of the highways contracted UF 9m (USD 360m) in holdco debt to provide a dividend recapitalization to Brookfield upon closing the stake sale.
The September transaction represents the first investment from Fondo de Inversion CMB-LV Infraestructura III, a joint venture between Chilean investors CMB and Larraín Vial. The vehicle has raised USD 400m in commitments since launching in June 2018.
The investment in the toll roads holdco represents Ardian’s third investment in Latin America and its first in transportation infrastructure. This followed the acquisition of the 19MW Moquegua solar PV plant in Peru and a portfolio of three solar PV plants in Chile with a total capacity of 26.5MW, both in September 2016.
Ardian has assets under management of USD 96bn, predominantly across Europe, but has invested in North American renewables since raising the USD 800m Ardian Americas Infrastructure Fund IV in 2017. The fund is targeting a net IRR of between 10-13%.
Ardian opened an office in Chile in June 2018.
Asset Chile acted as financial advisor and Baraona Fischer & Cia as legal counsel to Ardian and CMB. JP Morgan, Scotiabank and Carey y Cía. represent the sellers Brookfield.