Headnote
NP 11-203 – decision exempting the Filer from the qualification criteria under paragraph 2.3(d) of NI 44-101 and section 2.3 of NI 44-102 for filing a short form prospectus in the form of a base shelf prospectus – Filer is successor issuer that cannot rely on exemption in subsection 2.7(2) of NI 44-101 – decision subject to condition that Filer incorporate by reference AIF and consolidated annual financial statements of predecessor entities in any base shelf prospectus filed in reliance on this decision – decision subject to condition that Filer include certain disclosure directly in any base shelf prospectus filed in reliance on this decision – decision shall only be valid until such time as Filer is required to file annual information form and annual financial statements in respect of next financial year ending after date of decision
Applicable Legislative Provisions
National Instrument 44-101 Short Form Prospectus Distributions, ss. 2.3(d) and 8.1.
National Instrument 44-102 Shelf Distributions, ss. 2.3 and 11.1.
July 9th, 2008
In the Matter of
the Securities Legislation of
Ontario (the Jurisdiction)
and
In the Matter of
the Process for Exemptive Relief Applications in Multiple Jurisdictions
and
In the Matter of
Brookfield Renewable Power Inc. (the Filer)
Decision
Background
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for a decision under the Legislation exempting the Filer from the qualification criteria under paragraph 2.3(d) of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) and section 2.3 of National Instrument 44-102 Shelf Distributions (NI 44-102) for filing a short form prospectus in the form of a base shelf prospectus (a Base Shelf Prospectus) (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, the Yukon Territory and the Nunavut Territory (the Passport Jurisdictions).
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
The Filer was formed under the Business Corporations Act (Ontario) (OBCA) on March 31, 2008 through the amalgamation (the Amalgamation) of Brookfield Power Inc. (BPI) and Brookfield Power Corporation (BPC), and continued as one corporation under the name “Brookfield Renewable Power Inc.”. The head office of the Filer is located at Brookfield Place, 181 Bay Street, Suite 300, PO. Box 762, Toronto, Ontario M5J 2T3. The Filer is a venture issuer (as defined in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102)).
The Filer has been a reporting issuer or the equivalent thereof in the Jurisdiction and each of the Passport Jurisdictions since March 31, 2008. The Filer is not, to its knowledge, in default of its reporting issuer obligations under the Legislation or the securities legislation of the Passport Jurisdictions. The Filer has a December 31st financial year end.
Prior to the Amalgamation, BPI was a wholly-owned subsidiary of Brookfield Asset Management Inc. (Brookfield), an asset management company focused on property, power and infrastructure assets. Brookfield has approximately US$95 billion of assets under management and is listed on the Toronto, New York and the Euronext Amsterdam Exchange.
BPI was also a reporting issuer until September 12, 2005 under the name "Brascan Power Inc. (formerly Great Lakes Power Inc.)". To the best of the Filer’s knowledge, during the time that BPI was a reporting issuer it was not in default of any of its reporting issuer obligations.
Prior to the Amalgamation, BPC was a wholly-owned finance subsidiary of BPI. BPC had been a reporting issuer or the equivalent thereof in the Jurisdiction and each of the Passport Jurisdictions since March 18, 2005, and, at the time of the Amalgamation, BPC was not, to its knowledge, in default of its reporting issuer obligations under the Legislation or the securities legislation of the Passport Jurisdictions.
None of BPC’s securities were listed on any stock exchange, but its debentures and medium term notes, all of which were unconditionally guaranteed as to the payment of principal, premium (if any) and interest by BPI, were publicly held.
As at March 31, 2008, the date of the Amalgamation, Brookfield was the sole beneficial holder, directly or indirectly, of all of the equity securities of each of BPI and BPC.
As at March 31, 2008, BPC had filed its annual financial statements for the year ended December 31, 2007, related management’s discussion and analysis and annual information form (BPC AIF) for the year ended December 31, 2008. The BPC AIF includes disclosure related to its parent, BPI, as guarantor of BPC’s public indebtedness. Though BPI was not required to file an AIF, the disclosure related to BPI in the BPC AIF would have satisfied the requirements in Form 51-102F2 Annual Information Form (Form 51-102F2) in respect of BPI, except that the BPC AIF does not:
(a) contain the dividend related disclosure required by Item 6 of Form 51-102F2 in respect of BPI;
(b) contain the audit committee related disclosure required by Form 52-110F2 Disclosure by Venture Issuers (Form 52-110F2) in respect of BPI; and
(c) contain the corporate governance disclosure required under Form 58-101F2 Corporate Governance Disclosure (Venture Issuers) (Form 58-101F2) in respect of BPI.
As at March 31, 2008, BPC also filed BPI’s annual consolidated financial statements in respect of BPI’s financial year ended December 31, 2007 and related management’s discussion and analysis (the BPI Financial Statements). The BPI Financial Statements include consolidated financial information about BPI and BPC.
On March 31, 2008, the Amalgamation was completed in accordance with the OBCA and the Legislation. As BPC and BPI were both direct or indirect wholly-owned subsidiaries of Brookfield, an information circular was not required to be prepared in connection with the Amalgamation. Accordingly, the Filer cannot make use of the exemption provided under section 2.7(2) of NI 44-101 to qualify to file a prospectus in the form of a short form prospectus.
The Filer is a “successor issuer” to BPC, as defined in NI 44-101, given that it was formed through the amalgamation of BPC and BPI.
The Filer assumed, by operation of law, all of BPI’s and BPC’s obligations at the time of the Amalgamation, including any outstanding public indebtedness.
The Filer’s only business is that of owner, manager, operator and developer of primarily hydroelectric generation facilities, which was carried out by BPI and BPC prior to the Amalgamation.
The Filer has adopted the BPC AIF and BPI Financial Statements as its own, and such annual information form, financial statements and management’s discussion and analysis reflect the consolidated business and financial information of BPC and BPI.
All continuous disclosure documents of BPI that BPI would be required to incorporate by reference into a Base Shelf Prospectus, under section 11.1 of Form 44-101F1 Short Form Prospectus (Form 44-101F1), if BPI were the issuer thereunder, have been publicly filed on the System for Electronic Document Analysis and Retrieval (SEDAR) by BPC, including, for greater certainty, any applicable material change reports and business acquisition reports that would have been required to be filed under NI 51-102.
All continuous disclosure documents of BPC that BPC would be required to incorporate by reference into a Base Shelf Prospectus, under section 11.1 of Form 44-101F1, if BPC were the issuer thereunder, have been publicly filed on SEDAR by BPC, including for greater certainty, any applicable material change reports and business acquisition reports that would have been required to be filed under NI 51-102.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:
(a) at the time the Filer files a Base Shelf Prospectus, the Filer satisfies every qualification criteria set out in section 2.3 of NI 44-101 and section 2.3 of NI 44-102, other than the qualification criteria set out in paragraph 2.3(d) of NI 44-101,
(b) any Base Shelf Prospectus incorporates by reference
i. the BPC AIF,
ii. the BPI Financial Statements,
iii. any other document of BPC that would be required to be incorporated by reference into the Base Shelf Prospectus under section 11.1 of Form 44-101F1 if BPC were the issuer under the Base Shelf Prospectus, and
iv. any other document of BPI that would be required to be incorporated by reference into the Base Shelf Prospectus under section 11.1 of Form 44-101F1 if BPI were the issuer under the Base Shelf Prospectus,
(c) any Base Shelf Prospectus includes
i. the dividend related disclosure required by Item 6 of Form 51-102F2 in respect of BPI,
ii. the audit committee related disclosure required by Form 52-110F2 in respect of the Filer, and
iii. the corporate governance disclosure required under Form 58-101F2 in respect of the Filer, and
(d) the Exemption Sought shall only be valid until such time as the Filer is required, under the Legislation or the securities legislation of the Passport Jurisdictions, to file its annual information form and annual financial statements in respect of its next financial year ending after the date of this decision.
“Cameron McInnis”
Cameron McInnis, Manager
Corporate Finance