Aberdeen Standard Investments’ buyout of the Carlsbad Desalination Plant will be partially funded by holdco debt from a South Korean life insurance company, said two sources briefed on the situation.
That same insurer is also providing a co-invest on the deal with Aberdeen Standard.
As reported, Aberdeen-Standard won an auction to acquire the plant in the spring from a consortium comprised of Poseidon Water, a subsidiary if Brookfield Asset Management, and Stonepeak Infrastructure Partners. The equity check was reportedly in excess of USD 350m, and the enterprise value north of USD 1bn when accounting for the USD 700m in municipal bonds associated with the project.
Any buyer was limited by a previous agreement that the plant had in place to raise additional project-level debt. The insurer provided roughly USD 200m in holdco debt to help fund the deal, said the sources.
The deal is expected to close in the 4Q19 as it must clear multiple regulatory hurdles to get the deal across the finish line.
The identity of the investor was not determined by press time.
Active South Korean insurers in infrastructure globally include Hanwha Life Insurance and Samsung Life, according to Inframation Deals.
Aberdeen-Standard declined comment on the situation.