3i Infrastructure Regulatory News (3IN)

22 Aug 2007 14:21

3i Infrastructure Ltd22 August 2007 3i Infrastructure Limited22 August 2007 INVESTMENT IN 3I INDIA INFRASTRUCTURE FUND; RELATED PARTY TRANSACTION 3i Infrastructure Limited ("3i Infrastructure" or the "Company") announces aproposed investment in a fund (the "Transaction") being established by 3iInvestments plc, a subsidiary of 3i Group plc ("3i Group"), to invest in therapidly growing Indian infrastructure market (the "Fund"). The board believesthat the Transaction is an attractive opportunity because it will offer theCompany participation in a larger pool of investment capital, providing exposureto a diversified pool of assets and larger investments than the Company couldaccess on its own account. The proposed investment in the Fund is anarrangement pursuant to which the Company and a "related party" (namely, (a) 3iGroup, which is a "related party" because it is a "substantial shareholder" ofthe Company (holding 46.2 per cent. of the Ordinary Shares) and (b) 3iInvestments plc (a subsidiary of 3i Group) by virtue of its appointment asinvestment adviser to the Company), each invests in another undertaking. As aresult, under the UKLA's Listing Rules, the Transaction requires the priorapproval of the Company's shareholders (the "Shareholders"). The Company hasposted a circular to its Shareholders today, convening a meeting for Monday 10September 2007, to propose a resolution to approve the Transaction. It is proposed that 3i Infrastructure commits US$250 million to the Fund. Asannounced by 3i Group today, 3i Group will commit a minimum of US$250 million tothe Fund. The Fund has a target size of US$1 billion and, accordingly, othercommitments will be sought from third party investors in order to achieve thetarget fund size. The Company's investment policy is to build a diversified portfolio of equity(or equivalent) investments in entities owning infrastructure businesses andassets. The Company seeks investment opportunities globally but with an initialfocus on Europe, North America and Asia. The Company is aiming to build adiverse investment portfolio that balances the different yield and capitalgrowth characteristics of its underlying assets. In so doing, it will considerassets across sectors and the different stages of the assets' life cycle. The Transaction gives Shareholders access to the fast growing Indianinfrastructure market. The Company's directors expect that the demand forcapital to invest in this market will be particularly strong as inadequatelevels of existing infrastructure investment are estimated to be holding backthe country's rapid economic growth by up to two per cent. per annum, andbecause the Indian government is actively encouraging foreign investment andprivate sector involvement. Shareholders will benefit from excellent access toinvestment opportunities through 3i Group's global office network and local teamin Mumbai, its proposed Advisory Board for India and its strategic partnershipwith the government owned India Infrastructure Finance Company Limited. The Company's investment policy allows 3i Infrastructure the flexibility toinvest in fund structures if it considers that this represents the mostappropriate and effective means of investing. The Company's investment in theFund is consistent with the Company's investment strategy, as stated at the timeof its flotation, that it would focus on Europe, North America and Asia as itsprimary investment geographies. The Company's directors believe that 3iInfrastructure's investment in the Fund represents an excellent opportunity forthe Company to gain access to a balanced portfolio of investments in the Indianinfrastructure market, across different stages of the asset cycle as well asparticipation in larger infrastructure projects. The Fund's investment strategyis consistent with the Company's investment policy. It is proposed that the Company and 3i Group will make their respectivecommitments to the Fund through parallel co-investment partnerships which willinvest in all 3i Indian infrastructure opportunities in proportion to theirrespective commitments and on substantially similar terms. In due course othervehicles will be established as part of the Fund for investment by third partyinvestors and members of 3i Group's Infrastructure investment team. Peter Sedgwick, Chairman of 3i Infrastructure Limited said "At the time of theCompany's flotation, we identified India as a potentially attractive area ofinvestment given the expected demand for capital to invest in infrastructure.The Transaction represents an exciting opportunity for the Company to accessthis market through 3i Group's growing local investment team whilst benefitingfrom the scale and diversity of the Fund." Notes to Editors About 3i Infrastructure Limited 3i Infrastructure is a Jersey-incorporated, public close-ended investmentcompany. Its purpose is to build a diversified portfolio of infrastructureinvestments for investors. 3i Infrastructure was incorporated on 16 January2007 and listed on the London Stock Exchange on 13 March 2007. About 3i Group plc 3i Group is a leading private equity and venture capital group. It focuses onbuyouts, growth capital, venture capital, infrastructure and quoted privateequity and invests across Europe, the United States and Asia. 3i Group wasestablished in 1945 and listed on the London Stock Exchange in 1994. It is aconstituent of the FTSE 100 and MSCI Europe indices. Contacts: Citi Alex Carter/Henry Mullin +44 (0)20 7986 4000 This information is provided by RNS The company news service from the London Stock Exchange