REG - 3i Infrastructure - 3i Infrastructure plc – Pre-close update

3i InfrastructureAnnouncement

29/09/2023 07:00

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RNS Number : 0736O  3i Infrastructure PLC  29 September 2023

 

 

29 September 2023

 

3i Infrastructure plc - Pre-close update

 

 

Expected to deliver another period of outperformance

 

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 influence on our
portfolio companies and their stakeholders.

 

This statement relates to the period from 1 April 2023 to 28 September 2023
(the 'Period').

 

Scott Moseley and Bernardo Sottomayor, Managing Partners and Co-Heads of
European Infrastructure, 3i Investments plc, Investment Manager of the
Company, commented:

 

"3i Infrastructure plc is unique in the infrastructure sector. The Attero
realisation continues our extensive track record of creating value through
successfully managed exit processes and provides further evidence of our
ability to sell portfolio companies at a significant uplift to book value. Our
portfolio continues to deliver strong earnings growth and attractive
reinvestment opportunities across the majority of our assets. These factors
are likely once again to drive performance ahead of 3iN's target return."

 

 

Highlights

 

·    Attero sale: Represents a c.31% uplift to our latest valuation,
demonstrating the resilient demand for high-quality infrastructure businesses.
This exit also extends the Investment Manager's track record of achieving
exits a material premium to NAV. Completion is expected in Q3 FY24 subject to
regulatory approval.

 

·    Portfolio continues to deliver strong earnings growth and
reinvestment opportunities:

 

- ESVAGT is experiencing high utilisation and day rates across all segments. A
new ten-year contract with Ørsted was signed in July, under which ESVAGT will
deliver an additional renewable-fuel-enabled Service Operation Vessel ('SOV')
in support of the Hornsea 3 wind park.  ESVAGT is the clear market leader in
European SOV provision and is actively pursuing an attractive pipeline of
additional contracts in both Europe and the US

 

- TCR has delivered another period of strong performance, with earnings growth
materialising more rapidly than envisaged in our valuation case. In the
period, new contracts were won in multiple jurisdictions across Europe, the US
and Australia. TCR is experiencing supportive structural tailwinds including
an increasingly attractive product offering relative to finance leases, a
continued push by airports to switch to electric equipment when available, as
well as an increasingly global presence

 

- Tampnet has again outperformed our expectations. Digitalisation of the
offshore energy sector is gaining momentum and is supporting demand for
Tampnet's critical industrial use cases, including private networks. The
unique opportunity available for Tampnet in facilitating the energy transition
offshore is increasingly apparent, with noteworthy momentum starting to
materialise in the carbon capture and offshore wind segments.  During the
Period, Tampnet acquired DasNetz AG, an operator in the North Sea offshore
wind telecommunications segment

 

- Future Biogas has performed well since acquisition and is actively
progressing its investment pipeline. The proof of demand for Future Biogas's
offering was evidenced in the Period, as the company announced it had signed a
gas supply agreement with AstraZeneca ('AZ'). 3iN subsequently invested a
further £35 million in Future Biogas to fund the construction of the UK's
first unsubsidised anaerobic digestion plant in support of the AZ contract.
The plant will supply over 100GWh of biomethane to AZ's UK sites

 

- Ionisos closed a €60 million debt raise and 3iN invested €5 million of
additional equity to fund the acquisition of the E-beam facility in Daniken
and other advanced projects

 

- Valorem and GCX have also outperformed our investment case. Valorem
successfully raised a €75 million Green Euro PP and is finalising the farm
down of a minority stake in a subset of its French operational portfolio at
attractive terms, despite the current volatile market environment. GCX is
actively pursuing multiple opportunities which would maximise the value of its
existing cables and reposition the business as a leading subsea platform for
growth

 

- On 15 June, 3iN made a further investment into DNS:NET of €24 million to
fund the continued growth of its fibre network. DNS:NET continues to face a
more challenging fibre sector outlook in Germany, resulting in significant
delays in the rollout of its network around Berlin. As a result, we have
effected significant organisational changes, impacting both processes and
people, with the arrival of new CEO Ralph Steffens and an interim CFO. We will
be reflecting their initial assessment of an achievable business plan in the
September valuation

 

·    Income slightly ahead of expectations in the Period: Total income and
non-income cash in the Period was £103 million, up 5% from the same period
last year.

 

·    FY24 dividend target: The Company is on track to deliver the FY24
dividend target of 11.90 pence per share, up 6.7% from FY23, which is
expected to be fully covered by net income.

 

·    No material near-term refinancing risk in the portfolio: As disclosed
in the FY23 results, there are no material refinancing requirements in the
portfolio until 2026. As at the Period end date, c.92% of portfolio company
debt is either hedged or fixed rate and we expect that c.88% of portfolio
company debt will mature beyond the next three years.

 

 

Balance Sheet

 

At 29 September 2023, the Company was €724 million (£625 million) drawn
into its £900 million Revolving Credit Facility ('RCF') and has a cash
balance of £6 million. All drawings are in euros, with the cost of debt
linked to Euribor. The €215 million proceeds expected from completion of the
Attero realisation will be used to reduce the outstanding balance of the RCF.
The RCF commitments run to November 2026, after we exercised the second
one-year extension option available under the terms of the facility during the
Period.

 

 

Ends

 

 

For information, please contact:

 

 Thomas Fodor           Shareholder enquiries  +44 20 7975 3469
 Kathryn van der Kroft  Media enquiries        +44 20 7975 3021

 

 

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 influence
on our portfolio companies and their 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 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 2023 to 28 September 2023 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 changes 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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