3i sells 10% stake in 3i Infrastructure(3)

UK-listed private equity firm 3i Group has sold 77 million shares, or approximately 10 percent, of its holdings in its infrastructure investment arm 3i Infrastructure.

The sale, executed at 79p per share (€.89; $1.12), will reduce 3i Group’s holdings in 3i Infrastructure from 42.8 percent to 33.3 percent.

Since September 2008, when London Stock Exchange-listed 3i Infrastructure was consistently trading near its 52-week high of 120.75p, the stock has tumbled 40p and is now trading below its net asset value.

3i Group said the volatility was not a factor in the sale of the shares.

“The rationale is pretty clear. 3i developed the infrastructure business on its own balance sheet and when it reached a certain stage we listed a separate vehicle for that and 3i held 46 percent at the beginning  […]  we said at the time that we would reduce our stake in it in a responsible way,” Patrick Dunne, 3i Group Communications Director, told InfrastructureInvestor.

3i has also committed to a 180-day lock-up period on its remaining shareholding in 3i Infrastructure, meaning that it will not sell any additional shares over the next six months. The move is meant to give 3i Infrastructure shareholders clarity about 3i’s intentions, Dunne said.

Like many publicly  listed private equity firms, 3i’s share price has fallen drastically in recent months, collapsing from peaks of £10.05 in January 2008 and £9.56 in August last year, to just £2.46 in mid-December. This afternoon 3i’s shares were again trading down approximately 76 percent from their peak at £2.31 per share.

3i has said its investment portfolio lost 53 percent in the nine months ended December 31. Its top 50 investments, which accounted for 61 percent of the £5.9 billion portfolio value at 30 September, lost an estimated 21 percent, or £682 million, during the period.

Amid these developments, the firm recently announced that long-time chief executive Philip Yea would step down from his post. He was replaced by 3i infrastructure head Michael Queen, who in turn was replaced by 3i veteran Cressida Hogg.