Brookfield Says It's Mulling Loan to Invepar Rather Than OAS

  • 500 million reais loan would be repaid with asset-sale funds
  • Deal would be part of 2 billion reais shareholder loan

Brookfield Asset Management Inc., the largest independent asset manager in Canada, said it still may offer a loan to Brazilian company Investimentos e Participacoes em Infraestrutura SA, or Invepar, after withdrawing an offer for a 24 percent stake in the company this week.

OAS SA, the owner of Invepar, offered Brookfield “the opportunity to fund 500 million reais ($125 million) of a total 2 billion reais shareholder loan directly into Invepar,” Sam Pollock, the chief executive officer of Brookfield’s publicly traded infrastructure arm, said in a letter to shareholders Wednesday. The loan would be indexed to inflation, bear interest at about 20 percent and be repayable with the proceeds of any asset sales, according to the letter.

“Invepar will likely proceed with assets sales and we will be in a strong position to compete as we have already completed due diligence on all of the assets,” Pollock wrote.

The Toronto-based company dropped the idea of providing 800 million reais in debtor-in-possession financing to OAS, which is under bankruptcy protection against creditors, that would use the Invepar stake as collateral. Brookfield had offered 1.35 billion reais ($338.4 million) for the Invepar stake.

Brookfield withdrew its offer because it failed to reach an agreement with the company’s remaining shareholders -- three Brazilian pension funds that together control about three-quarters of the business -- in time to complete its due diligence, according to the e-mailed statement from OAS Tuesday.

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