Brookfield & Inter Pipeline Announce Shareholder Meeting and Executive Transition

Brookfield and Inter Pipeline have set a date for the Special Meeting of Shareholders to approve the Arrangement

Brookfield Infrastructure and Inter Pipeline announced that the Special Meeting of Inter Pipeline shareholders to approve the Arrangement will take place on October 28, 2021 at 8:30 a.m. MT.

Additionally, Inter Pipeline announced that Christian Bayle, President and Chief Executive Officer and Brent Heagy, Chief Financial Officer, will each be stepping down from their management positions effective at the closing of the Arrangement. At which time, Brookfield Infrastructure executives Brian Baker and Paul Hawksworth will assume the roles of interim Chief Executive Officer and Chief Financial Officer, respectively.

Inter Pipeline also announced the filing of its management information circular dated September 22, 2021 and related meeting and proxy materials in connection with the previously announced transaction with Brookfield Infrastructure Partners L.P., together with its institutional partners (collectively, “Brookfield Infrastructure”). The Circular and related materials are expected to be mailed to holders of common shares of Inter Pipeline in early October 2021.   

How to Vote

All Shareholders are encouraged to vote at the Meeting (virtually) or by proxy. Details on how to vote and how to participate at the Meeting via the live webcast are contained in the Circular.

The completion of the Arrangement is subject to, among other things, the approval of two thirds of the votes cast by the Shareholders at the Meeting, as well as majority of the minority approval under Multilateral Instrument 61‑101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) of the Shareholders (which requires the approval of a majority of votes cast by such shareholders at the Meeting, excluding certain votes of Brookfield Infrastructure and any other person required to be excluded for the purposes of MI 61-101).  Brookfield Infrastructure may vote the Common Shares acquired by it under its takeover bid of Inter Pipeline, which was completed on September 3, 2021, as part of the “minority” approval. 

As (i) Brookfield Infrastructure exercises control and direction over greater than 66 2/3% of the outstanding Inter Pipeline Common Shares and (ii) the Inter Pipeline Common Shares taken up under the take-over bid dated February 22, 2021, represent more than a majority of the votes attached to the Inter Pipeline Common Shares and may be voted in respect of any required “minority” approvals, Brookfield Infrastructure is in a position to ensure the successful outcome of the shareholder votes in respect of the Arrangement.  

Regarding Inter Pipeline’s Board

Inter Pipeline has reconstituted its board of directors (the “Board”) to include four Brookfield Infrastructure nominees, comprised of two Brookfield Asset Management Inc. executives, Brian Baker and Jim Reid, and two independent directors recommended by Brookfield Infrastructure: Deborah Close and Glenn Hamilton. The Inter Pipeline Board is comprised of Brian Baker, Christian Bayle, Shelley Brown, Peter Cella, Deborah Close (Chair), Glenn Hamilton and Jim Reid.

Regarding Dividends

The reconstituted Board has suspended Inter Pipeline’s monthly cash dividend, commencing with the September dividend. Inter Pipeline will utilize the retained cash flow to invest in the construction of the Heartland Petrochemical Complex and reduce indebtedness. As previously disclosed, Inter Pipeline’s declared August cash dividend of $0.04 per common share will be paid on or about September 15, 2021 to shareholders of record as of August 23, 2021.

Tax Election

The tax commentaries below are applicable to Canadian resident taxpayers (“Resident Holders”) that dispose Inter Pipeline Ltd. (“IPL”) common shares (“Common Shares”) to Bison Acquisition Corp (“BIPC”) or Brookfield Infrastructure Corporation Exchange Limited Partnership (“Exchange LP”) (collectively referred to as “Brookfield Infrastructure”).  The commentaries assume such Resident Holders own their IPL Common Shares as capital property. 

Disposition of IPL common shares for cash and BIPC shares

A Resident Holder that disposes of Common Shares to Brookfield Infrastructure for cash and/or BIPC Shares will be considered to have disposed of such Common Shares for proceeds of disposition equal to the aggregate fair market value of the cash and/or the BIPC Shares received.   Such a Resident Holder will realize a capital gain (or a capital loss) equal to the amount by which such proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the aggregate adjusted cost base to the Resident Holder of the Common Shares disposed of.  A Resident Holder that receives only cash and/or BIPC Shares for its Common Shares is not eligible to make a tax deferral election as noted below.  A Resident Holder should consult its own tax advisor on the determination of the fair market value of any BIPC Shares received on the disposition of its Common Shares and the computation of its capital gain (or capital loss), if any.

Disposition of IPL common shares for Exchange LP Units

A Resident Holder that disposes of Common Shares for Exchange LP Units will be considered to have disposed of such Common Shares for proceeds of disposition equal to the aggregate fair market value of the Exchangeable LP Units received, unless a valid election under subsection 97(2) of the Income Tax Act (Canada) is made.  A Resident Holder that does not make such an election will realize a capital gain (or a capital loss) equal to the amount by which such proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the aggregate adjusted cost base to the Resident Holder of the Common Shares disposed of. 

A Resident Holder may choose to defer all or a portion of any capital gain that would otherwise be realized on the exchange of its Common Shares for Exchangeable LP Units by filing with the Canada Revenue Agency (the “CRA”) (and, where applicable, with a provincial tax authority) a joint election under subsection 97(2) of the Income Tax Act (Canada) (“Joint Tax Election”).  However, a Resident Holder will not be eligible to make a Joint Tax Election if the Resident Holder held its Common Shares through a tax-exempt account, including, but not limited to, a registered retirement savings plan (“RRSP”), registered retirement income fund (“RRIF”), deferred profit-sharing plan (“DPSP”), registered education savings plan (“RESP”), registered disability savings plan (“RDSP”), or a tax-free savings account (“TFSA”).

To make a Joint Tax Election, an electing Resident Holder must provide the relevant information to Brookfield Infrastructure through this form [Inter Pipeline Ltd. Tax Election Form Questionnaire] (supported browsers for the form include Chrome, Firefox, Safari, and Microsoft Edge).  The relevant information must be submitted to Brookfield Infrastructure through this form on or before (i) November 2, 2021 (if the Resident Holder disposed of its Common Shares under the takeover bid) or (ii) the day that is 60 days after the Effective Date of the Arrangement (if the Resident Holder disposed of its Common Shares pursuant to the Arrangement).  After Brookfield Infrastructure receives all of the relevant information through the form, Brookfield Infrastructure will process and deliver the completed Joint Tax Election to the electing Resident Holder based on the responses provided by the Resident Holder.  The completed Joint Tax Election will not be available immediately after all of the information has been submitted but will be available before the filing due date (generally within 48 hours of submitting the form). However, a copy of a Resident Holder’s responses to the form will be emailed immediately upon submission of the questionnaire.  The Joint Tax Election will be delivered by email through a secure document via DocuSign. If you do not receive your Joint Tax Election within 48 hours of submitting the form, it is recommended checking your spam filters. After the receipt of the completed Joint Tax Election, each electing Resident Holder will be solely responsible for reviewing and executing (including entering Resident Holder’s Social Insurance Number on the form) its portion of the Joint Tax Election and submitting it to the CRA (and, where applicable, to any provincial tax authority) within the required time.  An electing Resident Holder should consult its own tax advisor on the completion of the Joint Tax Election.

*Note: A French version of the form will be available shortly.

An electing Resident Holder should have the following information available before starting the tax election process:

  • Confirmation of the transfer of its Common Shares to Exchange LP;
  • If applicable, confirmation that a Supplementary Election has been made;
  • Details of the number of Common Shares transferred to Exchange LP; and
  • Adjusted cost base of the Common Shares transferred to Exchange LP.

For greater certainty, Resident Holder should NOT file a Joint Tax Election if any of the following apply:

  • Resident Holder is a non-resident of Canada who is not required to file a Canadian tax return. Non-residents of Canada who dispose of shares in a Canadian corporation may have to file a Canadian tax return.
  • Please discuss your situation with your tax advisor;
  • Resident Holder held all of the exchanged Common Shares in a RRSP, RRIF, RESP, RPP, TFSA or other tax-exempt Canadian plan;
  • Resident Holder realized a capital loss for tax purposes as a result of the disposition of the exchanged Common Shares;
  • Resident Holder elected to receive ONLY cash and/or BIPC shares and did NOT receive any Exchange LP Units as part of the transaction.

Contact

Have questions? Require assistance depositing your shares in support of Brookfield? Contact Brookfield’s Information Agent and Depositary:

Laurel Hill Advisory Group
Email: assistance@laurelhill.com 
Tel:
1-877-452-7184 (North American Toll-Free Number)
Tel: 416-304-0211 (outside North America)

Investor Relations

Jeremy Roberge
Vice President, Finance and Investor Relations
Email: investorrelations@interpipeline.com
Tel: 403-290-6015 or 1-866-716-7473

Media Relations

Steven Noble
Manager, Corporate Communications
Email: mediarelations@interpipeline.com
Tel: 403-717-5725 or 1-866-716-7473

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