Key Takeaways
- • Blackstone Credit & Insurance funds and four Canadian institutional investors agreed to invest $3.1 billion for a 49.9% non-controlling interest in a Mitsubishi Corporation subsidiary holding Mitsubishi's stake in the LNG Canada export terminal, Blackstone announced November 2.
- • The investor group comprises CPP Investments, OMERS, the Investment Management Corporation of Ontario and PSP Investments, co-investing in a credit-led structure rather than buying the asset outright.
- • Mitsubishi retains control and its full share of LNG offtake, while the subsidiary holds a 15% interest in LNG Canada, a joint venture that also includes Shell, PetroChina, Petronas and KOGAS, according to CBC.
- • Goldman Sachs served as lead structuring agent and financial advisor to Blackstone, with Scotiabank also advising, and the deal extends Blackstone's recent corporate solutions investments, which sit within a $140 billion infrastructure and asset-based credit platform.
Summary
Funds managed by Blackstone Credit & Insurance, together with four Canadian institutional investors, have agreed to invest $3.1 billion to acquire a 49.9% non-controlling interest in a Mitsubishi Corporation subsidiary that holds Mitsubishi's interest in the LNG Canada export terminal, Blackstone announced on November 2. The investor group includes CPP Investments, OMERS, the Investment Management Corporation of Ontario and PSP Investments.
Under the structure, Mitsubishi will remain the controlling partner and keep its full share of LNG offtake. The subsidiary holds a 15% interest in LNG Canada, a joint venture that also includes Shell, PetroChina, Petronas and KOGAS, according to CBC. LNG Canada is Canada's first large-scale LNG export terminal, and its Phase 2 expansion, once complete, will double capacity to 28 million tonnes per annum.
Rick Campbell, a senior managing director at Blackstone Credit & Insurance, described the firm as a financial partner supporting one of Canada's most significant energy projects. Geoff Souter, who heads real assets credit at CPP Investments, called the asset high quality and strategic, with attractive return potential for the CPP Fund. Goldman Sachs was lead structuring agent and financial advisor to Blackstone, with Scotiabank also advising.
Blackstone said the deal builds on its recent corporate solutions investments, including a CDN$7 billion investment in Rogers, a $16 billion partnership with Kuwait Oil Company and a $7 billion investment in Port Arthur LNG Phase 2. Its infrastructure and asset-based credit platform manages $140 billion.
The transaction is notable for its structure: a non-controlling stake in a holding company allows a large corporate to raise capital against a core asset without ceding control or offtake, and the Canadian pension funds are participating in a credit-led format rather than acquiring the asset outright.
Under the structure, Mitsubishi will remain the controlling partner and keep its full share of LNG offtake. The subsidiary holds a 15% interest in LNG Canada, a joint venture that also includes Shell, PetroChina, Petronas and KOGAS, according to CBC. LNG Canada is Canada's first large-scale LNG export terminal, and its Phase 2 expansion, once complete, will double capacity to 28 million tonnes per annum.
Rick Campbell, a senior managing director at Blackstone Credit & Insurance, described the firm as a financial partner supporting one of Canada's most significant energy projects. Geoff Souter, who heads real assets credit at CPP Investments, called the asset high quality and strategic, with attractive return potential for the CPP Fund. Goldman Sachs was lead structuring agent and financial advisor to Blackstone, with Scotiabank also advising.
Blackstone said the deal builds on its recent corporate solutions investments, including a CDN$7 billion investment in Rogers, a $16 billion partnership with Kuwait Oil Company and a $7 billion investment in Port Arthur LNG Phase 2. Its infrastructure and asset-based credit platform manages $140 billion.
The transaction is notable for its structure: a non-controlling stake in a holding company allows a large corporate to raise capital against a core asset without ceding control or offtake, and the Canadian pension funds are participating in a credit-led format rather than acquiring the asset outright.
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