U.K’s listed private equity major, 3i has sold part of its stake in its infrastructure fund taking the total raised from disposals this year to £160m. This also has shares in 3i’s Indian infrastructure fund. The sale of a 9.5 per cent stake in 3i Infrastructure generated £60.8m for 3i, leaving it with a 33.3 per cent stake.
This move comes after Michael Queen, the former head of 3i Infrastructure, replaced Philip Yea as the group’s chief executive in a surprise succession.
3i has high debt levels on its balance sheet and it is believed that Mr Queen will seek to raise cash for cutting 3i’s debt pile, while avoiding a deeply discounted rights issue. Two of its biggest assets are stakes in its separately listed infrastructure and quoted private equity businesses.
With ongoing liquidity crisis, high debt levels on its balance sheet, selling its key assets as distressed prices, there also have been reports of 3i being a candidate for a potential merger or a sell out.
“In the febrile market, this move has the combined benefits of removing speculation about the group’s intentions with respect to 3i Infrastructure, increasing the 3i Infrastructure free float and delivering capital back to the group,” 3i said. Shares closed down 5p at 227p.
3i group raised $1.2 billion for its 3i India Infrastructure Fund (“the Fund”), exceeding the $1 billion target by 20%. The fund invested $227 million in Adani Power, which developed a portfolio of power plants across India, as well as a US$101 million investment in Soma Enterprise, an infrastructure developer focussing on build-operate-transfer (BOT) projects, among other investments. n 2007, 3i formed a strategic partnership with the Indian Government-owned India Infrastructure Finance Corporation Limited (IIFCL) to cooperate on financing infrastructure projects in India