3i results hint at possible fundraise, Elenia exit

3i Infrastructure will find itself with a smaller pool of money to deploy after completing its purchase of UK energy firm Infinis, the latest in a series of investments sealed in recent months.

Half-year results released yesterday show the firm’s cash balance standing at £135.9 million ($170 million; €153 million) as at 30 September, a figure set to reduce after its £185 million acquisition of Infinis concludes, which is expected later this month. 3i Infrastructure’s £300 million revolving credit facility will then be nearly £90 million drawn, according to a note by Numis Securities.

The broker suggests this will either induce the firm to raise fresh capital to pay down the facility or accelerate its strategic review and potential sale of Elenia, a Finnish utility in which it owns a 45 stake alongside GS Infrastructure Partners (45 percent) and local pension Ilmarinen (10 percent).

Elenia is 3i Infrastructure’s largest income-producing asset, accounting for about 28 percent of total income in the six months to end September. The company’s valuation increased 9.35 percent to £397 million over the period.

3i Infrastructure declined to comment on its future capital raising or divestment plans. In an interview last month with Infrastructure Investor, however, the unit’s co-heads Ben Loomes and Phil White confirmed the firm was reviewing its options regarding Elenia. While they said no decision had been taken, they noted the company’s high-yielding, low-risk profile made it a very attractive asset in today’s market.

3i Infrastructure’s acquisition of Infinis, another high-yielding asset, could “make the decision to sell an easier one for management”, Numis said. The firm could also decide to tap investors for further capital after its successful June fundraise, through which it collected £385 million after beating its initial £350 million target.

The company’s portfolio was valued at £1.59 billion at 30 September, a sharp increase on its £1.22 billion value at 31 March. The jump is largely explained by the four new investments it completed over the period, which comprise UK towers business Wireless Infrastructure Group, airport ground services provider TCR, French renewables developer Valorem and the Netherlands’ Hart van Zuid PPP.