Following the release of its interim results, 3i Infrastructure has announced the launch of £350m capital raising, by way of an open offer, placing and intermediaries offer. The company says that the proceeds to be used to fund the completion of its investments in Wireless Infrastructure Group and TCR, totalling approximately £230m, and to make further investments in line with the Company’s investment policy. The company also says that 3i Group plc has undertaken to subscribe for its full entitlement under the capital raise and that it has the ability to an additional £130m, subject to demand and investment pipeline (the company says this amounts to over £400m).
The fund raising is being conducted at a price of 165 pence per new ordinary share, which represents a premium of 4.8% to the net asset value per existing ordinary share as at 31 March 2016 of 161 pence (adjusted for the final dividend for the financial year ended 31 March 2016 of 3.625 pence per ordinary share) which will be marked “ex” on 19 May 2016. The company says that the offer price represents a discount of 5.9% to the middle market closing price of 179 pence per existing ordinary share on 11 May 2016 (adjusted for the final dividend).
During the year to 31 March 2016, the company provided an NAV total return of 14%, which is ahead of the company’s target total return per annum of between 89% and 10%. The company says that this was driven by robust performance of the portfolio, including a positive impact of regulatory developments on the value of the Company’s holding in Elenia. Share price total return during the period was 12.6%. The board has declared a final dividend of 3.625p per share bring the total dividend for the year to 7.25p, an increase of 4% year-on-year.
In terms of portfolio activity, the company invested or committed to invest £193m during the period. This was in four new investments across mid-market economic infrastructure businesses and greenfield projects, redeploying a significant portion of the proceeds from the sale of the Company’s interest in Eversholt Rail. The company says that the new investments completed in the year are performing well and contributed to income generation in the second half of the year, in line with their expectations at the time of investment. In addition, since the year end, the company has announced that it is to invest approximately £75 million in WIG and €200 million in TCR, in transactions expected to complete by the end of June and the end of August 2016 respectively, subject to regulatory clearance, and a further €5 million in the Hart van Zuid primary PPP project. The company says that these are complementary additions to its investment portfolio, providing further geographical and sector diversification. The company says that it continues make progress with the realisation of the assets in the India Fund. They say that, following the sale of approximately 54% of Adani Power in the last financial year, the India Fund sold its holding in Ind-Barath Energy during 2016 and the proceeds from that sale are expected to be received in the first quarter of 2017.
3i Infrastructure is raising £350m to fund new investments : 3IN