LONDON (Alliance News) - 3i Infrastructure PLC Thursday launched a substantial capital raising in order to fund new investments and committed to a progressive dividend policy moving forward after increasing the payout in the recently ended financial year.
The placing will see 3i Infrastructure raise around GBP350.0 million by issuing shares equal to more than a quarter of its existing share capital, and at a discount to its closing share price on Wednesday.
3i said its dividend for the financial year to the end of March rose 4.0% to 7.25 pence from 7.0 pence a year earlier, meeting the company's target, and pledged to pay a dividend of 7.55 pence per share this year.
If delivered, that rise would mean the dividend payout this year will rise by a further 4.0%.
3i said its total return of GBP166.0 million from its operating assets in the year amounted to 14% of its net asset value, dropping from GBP266.8 million, 24.6% of its NAV, a year earlier. Notably, 3i said its medium-term target is to deliver a total return between 8.0% and 10%, suggesting that is expected to fall in the future.
The net asset value per share rose to 161.0 pence from 149.9 pence in the last financial year as the value of its portfolio dropped a smidgen to GBP1.22 billion.
Total income in the year amounted to GBP64.1 million compared to GBP79.8 million in the prior year.
3i invested GBP193.0 million during the year but has pledged to make further investments in Wireless Infrastructure Group and TCR, prompting it to launch a fundraising in order to complete them.
3i has proposed raising GBP350.0 million from an open offer, placing and intermediaries offer, and said it may opt to raise a further GBP130.0 million on a non pre-emptive basis dependent on demand.
The investments in Wireless Infrastructure and TCR will cost a total of GBP230.0 million, with the remaining proceeds to be used for further investments.
The capital raising will be priced at 165.0 pence per share, a premium of 4.8% from the NAV at the end of March but a 5.9% discount to the closing share price on Wednesday. 3i Group PLC has pledged to take up its full entitlement in the offer.
The price implies around 212.1 million new shares will be issued under the GBP350.0 million raising, equal to around 26.7% of the existing share capital and around 21.0% of the enlarged issued capital.
3i shares were down 5.0% to 170.0 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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