Brookfield Infrastructure to become a Canadian Corporation and Split 9 to 1

Brookfield Infrastructure will convert to a Canadian corporation and will have a reverse stock split of 9 to 1. If you own Units in BIP.UN, they will be converted into BIPC Class A shares once the transaction is complete. For every 9 shares of BIP, you will receive 1 share of BIPC. The dividend will remain the same.

There are some benefits of the creation of BIPC. This will increase demand from U.S. investors due to more favorable tax attributes, and an increase demand from investors that normally do not invest in partnership units. Which means that there will be more money chasing the shares, potentially increasing the share price.



So what does it means for us, Canadian investors? Is it good news or bad news? It depends where you hold your shares. If you hold them in registered accounts like TFSA or RRSP, then it doesn’t really matter. If you own BIP in taxable account then you will benefit from lower tax rate due to tax credits.

I currently own 189 share of BIP in TFSA which will be converted into 20.667 shares of BIPC shares. I‘m not sure If I will receive 20 new shares and rest paid out in cash. That, we will find out once it happens.

If you own BIP, let me know what you think of this transaction and how you will be affected.