InstarAGF Asset Management and Steel Reef Infrastructure Corp. have announced that the InstarAGF Essential Infrastructure Fund has invested CAD$75 million (US$59.3 million) of equity in Steel Reef.
InstarAGF Essential Infrastructure Fund has subscribed 34,883,721 common shares at a price of CAD$2.15 per share, representing 20.6% of Steel Reef’s outstanding common shares.
In connection with the fund’s investment, Gregory J. Smith, President and Chief Executive Officer of InstarAGF, has been appointed to Steel Reef’s Board of Directors.
Formed in 2012, Steel Reef is a privately held Canadian midstream company that owns and operates processing and transportation facilities which provide value-added services for oil, natural gas and natural gas liquids. These facilities are located in low cost, high quality formations within the Western Canadian Sedimentary Basin.
InstarAGF, which focuses on mid-sized infrastructure assets in North America in the energy, utilities, civil and social infrastructure categories, achieved the fund’s first close in March 2016 with Canadian and international institutional and high net-worth investors. The fund’s portfolio also includes an interest in the passenger terminal at Billy Bishop Toronto City Airport, a vital transportation hub for the city of Toronto and surrounding region, and a 30-megawatt wind power development project in British Columbia that is expected to commence operations in the first quarter of 2017.
Gregory J. Smith stated:
“This is an outstanding opportunity for the Fund to acquire a significant minority interest in an established midstream platform that is focused on the middle market, led by a proven management team, and generating stable cash flows. The basins in which Steel Reef operates are considered superior plays with strong economic fundamentals and low producer breakeven points. Further, Steel Reef has a record of successfully building, acquiring and operating midstream assets, and is actively pursuing a number of opportunities that we expect to create additional value for investors.”
Scott Southward, President and Chief Executive Officer of Steel Reef, commented:
“We are pleased to welcome InstarAGF as an investor in our company. This investment will help fund several near-term organic growth initiatives and enable us to pursue new infrastructure projects in top-tier basins. We are focused on maximizing the value of our portfolio, and are well positioned for continuing growth.”