3i Infra hit by falling Adani share price

The declining share price of Indian power producer Adani Power continues to afflict 3i Infrastructure. Adani is a portfolio company of the 3i India Infrastructure Fund, in which 3i Infrastructure is a shareholder.

In an interim management statement 3i Infrastructure, the UK-listed infrastructure investment firm, revealed that the share price of Adani Power – a listed Indian energy firm in which the 3i India Infrastructure Fund is a shareholder – had fallen 28 percent between 1 April 2012 and 9 July 2012.

The statement added that 3i Infrastructure’s holding in the India Fund had also been impacted by foreign exchange losses due to its unhedged Indian rupee exposure, with sterling having appreciated by 6 percent against the rupee since 1 April this year.

3i Infrastructure invested $250 million in the 3i India Infrastructure Fund when it closed on $1.2 billion in 2008. According to the firm’s website, the fund was 70 percent invested at the end of March this year.

Overall, 3i Infrastructure portfolio assets generated income of £12.2 million (€15.4 million; $19.0 million) from 1 April to 9 July 2012. This compares with £19.8 million in the same period last year, which the statement attributes to an anticipated lower dividend from AWG, the parent company of UK water utility Anglian Water, which has been “affected by increased spending on measures necessary to mitigate the effects of drought”.

The statement added that the firm’s current cash balances stood at £144.2 million, and said it was developing a “diverse pipeline of investment opportunities”. 3i Infrastructure most recently invested $7.5 million in a portfolio of build-operate-transfer road companies owned by Indian construction firm Supreme Infrastructure, in which the India Fund invested $35.9 million.

“The assets in the portfolio continue to perform well operationally and financially, although market headwinds continue to weigh on the performance of the 3i India Infrastructure Fund,” said 3i Infrastructure chairman Peter Sedgwick in the statement.

The firm is expecting to issue its results for the six months to 30 September 2012 in November.