The Babcock & Brown affiliate will place between $50 million and $90 million of new stapled securities to institutional investors and would look to raise up to $55 million in a share sale to retail investors.
The group will use part of the capital raising for ongoing expansion plans at Dalrymple Bay from 54 million tonnes to about 90 million tonnes a year.
Shareholders will have to approve the plan, which also includes Babcock & Brown taking management control of Prime which will be converted to a managed fund renamed Babcock & Brown Infrastructure.
Prime chairman David Hamill said the renaming would be accompanied by management changes.
"Based on their preliminary review, the independent directors consider the proposal is designed to ensure continuing alignment of the relationship with Babcock & Brown and has the potential to add value to Prime Infrastructure's security holders," Hamill said.
He said the raising should enhance the fund's ability to secure new investment opportunities, particularly overseas where Babcock & Brown is a well known brand.
"The even closer alignment provided by the proposed restructure should encourage Babcock & Brown, if necessary, to undertake greater balance sheet exposure to assist in the future growth of the fund," he said.
The Queensland Competition Authority is yet to make a final ruling on what Prime can charge coal producers per tonne, after issuing a draft ruling last year dropping the user fees by 26%.
