TIDM3IN
RNS Number : 2469B
3i Infrastructure PLC
30 September 2022
30 September 2022
3i Infrastructure plc - Pre-close update
Portfolio generating strong momentum, expected to exceed target
returns
3i Infrastructure plc ('3iN' or the 'Company') is an investment
company whose purpose is to invest responsibly in infrastructure,
delivering long-term sustainable returns to shareholders and having
a positive impact on our portfolio companies and their
stakeholders. This statement relates to the period from 1 April
2022 to 29 September 2022 (the 'Period').
Highlights
-- Portfolio performing strongly: Our portfolio has continued to
perform robustly and ahead of expectations set at March 2022. 3iN's
portfolio demonstrates a positive correlation between inflation,
power prices and total portfolio value. In addition, our strategy
of identifying resilient companies, positioned to benefit from
structural mega-trends, provides the foundation for sustainable
value growth and positive real returns across the portfolio. We
expect to report growth in net asset value ahead of the Company's
target return for the Period.
-- No near-term portfolio refinancing exposure: Following the
recent refinancing of Tampnet, there are no material refinancing
requirements in the portfolio until 2026. Over 85% of our long-
term debt facilities are either hedged or fixed rate.
-- Extension of 3iN's credit facilities: The Company has
extended its existing Revolving Credit Facility ('RCF') of GBP900
million to November 2025.
-- FY23 dividend target: The Company is on track to deliver the
FY23 dividend target of 11.15 pence per share, up 6.7% from FY22,
which we expect to be fully covered.
-- Income exceeded expectations in the Period: Income of GBP73
million and non-income cash of GBP25 million were received in the
Period, both slightly ahead of expectations. This compares with
income of GBP56 million and no non-income cash received in the same
period last year.
Scott Moseley and Bernardo Sottomayor, Managing Partners and
Co-Heads of European Infrastructure, 3i Investments plc, Investment
Manager of the Company, commented: "This is a high quality and
differentiated portfolio, with proven resilience, that is
structurally positioned to continue to deliver value growth in real
terms. The market for infrastructure investments remains
competitive, with significant fund-raising activity amongst our
private markets' competitors and strong demand for quality
infrastructure assets."
Portfolio update
The portfolio is delivering strong performance from its
differentiated exposure to mega-trends including energy transition,
digitalisation and connectivity. Additionally, power prices and
inflation have provided a strong tailwind in the Period.
Infinis , Attero and Valorem are making good progress in
expanding their renewable energy development platforms. I nfinis'
plans to develop solar energy generation and battery storage are
progressing well, as is the conversion of the pipeline of renewable
energy projects at Valorem.
TCR has continued to perform ahead of our expectations and has
now returned to its pre-COVID EBITDA. As the air travel industry
recovers from the pandemic, TCR is seeing an uptick in interest for
its full service rental model. The acquisition of DWS's 48% stake
will enable 3iN to take full advantage of future growth
opportunities in airports around the world.
ESVAGT has outperformed our expectations in the Period. The
emphasis on security of energy supply in Europe is providing
positive momentum in both the Emergency Response and Rescue Vessel
segment and offshore wind.
Tampnet performed strongly in the Period, benefitting from
accelerating digitalisation offshore, the renewed focus on energy
security and industrial innovation in its core North Sea and Gulf
of Mexico basins and inflation linkage of its revenues.
As is generally the case across the German fibre-to-the-home
market, DNS:NET is experiencing some delays in the roll-out of its
network in Berlin. In our view, this is a timing issue and we
remain confident in achieving the roll-out targets.
On 2 September 2022, 3iN completed its $377 million investment
to acquire a 100% stake in Global Cloud Xchange ('GCX'), a leading
global data communications service provider and owner of the
world's largest private subsea fibre optic network.
The remainder of the portfolio performed well during the Period.
As usual, an important element of the determination of the
Company's results for the half-year to 30 September 2022 will be
the valuation exercise carried out on the investment portfolio at
that date. Given the significant risk premium included in our
long-term discount rates and the continued appetite for high
quality infrastructure businesses, we do not anticipate that rising
risk-free rates will impact our discount rates in the Period.
Balance sheet
At 29 September 2022, the Company's cash balance was GBP15
million, with drawings of GBP310 million under the RCF. The cash
balance and drawings are after the completion of GCX and include
proceeds from the syndication of 16.9% of the Company's stake in
ESVAGT of GBP91 million, the sale of the European projects
portfolio of GBP106 million and the proceeds of GBP101 million from
the vendor loan note due from the sale of WIG in 2019, all of which
completed in the Period. The acquisition of DWS's stake in TCR for
c.GBP334 million is due to complete in October 2022.
On 6 July 2022, the Company restructured and extended its
existing RCF to GBP900 million maturing in November 2024,
comprising a base facility of GBP600 million and commitments under
an accordion facility of GBP300 million. The previous commitments
under the one-year credit facility of GBP400 million to January
2023 have been cancelled. In September 2022, the GBP900 million RCF
has been extended to November 2025. This provides increased
flexibility over how and when to repay drawings under the facility,
as well as longer-term liquidity to make further investments.
Ends
For information, please contact:
Thomas Fodor Shareholder enquiries +44 20 7975 3469
Kathryn van der
Kroft Media enquiries +44 20 7975 3021
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About 3i Infrastructure plc
3i Infrastructure plc is a Jersey-incorporated, closed-ended
investment company, an approved UK Investment Trust, listed on the
London Stock Exchange and regulated by the Jersey Financial
Services Commission. The Company's purpose is to invest responsibly
in infrastructure, delivering long-term sustainable returns to
shareholders and having a positive impact on our portfolio
companies and stakeholders.
3i Investments plc, a wholly-owned subsidiary of 3i Group plc,
is authorised and regulated in the UK by the Financial Conduct
Authority and is the investment manager of 3i Infrastructure
plc.
This press release is not for distribution (directly or
indirectly) in or to the United States, Canada, Australia or Japan
and is not an offer of securities for sale in or into the United
States, Canada, Australia or Japan. Securities may not be offered
or sold in the United States absent registration under the U.S.
Securities Act of 1933, as amended (the 'Securities Act'), or an
exemption from registration under the Securities Act. Any public
offering to be made in the United States will be made by means of a
prospectus that may be obtained from the issuer or selling security
holder and will contain detailed information about 3i Group plc, 3i
Infrastructure plc, 3i India Infrastructure Fund and management, as
applicable, as well as financial statements. No public offering in
the United States is currently contemplated.
This statement aims to give an indication of material events and
transactions that have taken place in the period from 1 April 2022
to 29 September 2022 and their impact on the financial position of
3i Infrastructure plc. These indications reflect the Board's
current view. They are subject to a number of risks and
uncertainties and could change. Factors which could cause or
contribute to such differences include, but are not limited to,
general economic and market conditions and specific factors
affecting the financial prospects or performance of individual
investments within the portfolio of 3i Infrastructure plc.
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END
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