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

3i InfrastructureAnnouncement

01/10/2024 07:00

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RNS Number : 3422G  3i Infrastructure PLC  01 October 2024

 

1 October 2024

 

3i Infrastructure plc - Pre-close update

 

 

Portfolio performing well

Partial syndication of Future Biogas at premium valuation

 

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 2024 to 30 September 2024
(the 'Period').

 

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

 

"We are pleased to report another good performance, which extends our
established track-record of consistent execution against our strategy. We have
a portfolio of defensive businesses, in attractive growth markets. By working
in an engaged and active manner with their management teams we improve the
performance of those businesses and help firmly position them as sought-after
infrastructure assets. Along with continued momentum across the portfolio, the
partial syndication of Future Biogas illustrates the success of our strategy.
We remain confident of making continued progress and are excited about the
value creation opportunities in our portfolio."

 

·    Future Biogas ('FB'): On 29 August 2024, FB completed the acquisition
of a 51% stake in a portfolio of six anaerobic digestion plants already
operated by FB on behalf of JLEN for c.£68 million. £30 million was funded
by 3iN, with the balance funded by FB from committed debt facilities. The
transaction brought immediate scale to the FB platform and helped the company
successfully transition from being a third-party plant operator to an asset
owner and developer. Business performance continues to be strong.

 

On 27 September 2024, 3iN signed an agreement to syndicate c.23% of its stake
in FB to RWE Energy Transition Investments ('RWE'), an investment vehicle of
RWE Supply & Trading GmbH, the energy trading arm of global renewable
energy company RWE AG. Completion took place on the same day.

 

RWE invested £35 million in FB at an entry price representing a 15% premium
to the Company's valuation at 31 March 2024, which highlights the potential of
the platform and underscores the strong progress FB has made since 3iN first
invested. Of the investment by RWE, £30 million will be used to partially
repay drawings on 3iN's RCF. The remaining £5 million will be retained by FB
to partially fund its pipeline of future growth opportunities.

 

Governance arrangements for FB through 3i Investments plc, the Company's
Investment Manager, will be maintained, in a similar way to previous
syndications by the Company.

 

·    TCR continues to perform well with demand for TCR's rental offering
remaining strong. It has won notable new contracts and is in exclusive
negotiations to operate a Ground Support Equipment pool at a major
international airport, which would represent a step-change in its presence
outside of Europe.

 

·    Tampnet has performed well and is delivering EBITDA growth ahead of
expectations in both the North Sea and the Gulf of Mexico. The business
development pipeline is strong across each of its business lines and across
new geographies. During the Period, Tampnet was awarded a contract for its
first fibre project in the Mexican deepwater and has also made impressive
progress with its private networks product offering.

 

·    ESVAGT continued its robust performance and outperformed our
investment case. High utilisation and day rates have continued during the
Period. The Service Operation Vessels ('SOV') offshore wind market outlook is
strong with the European and US pipelines continuing to grow, driven by
government targets and an increased focus on energy security. ESVAGT is also
making early progress with its Korean joint venture. As previously announced,
ESVAGT closed a €200 million committed debt facility at attractive rates,
providing additional capital in support of its fast-growing SOV pipeline.

 

·    Global Cloud Exchange ('GCX') had a strong six months and
outperformed our investment case. The increasing need for subsea data
capacity, as well as continuing delays in deployment of new systems due to
ongoing geopolitical instability, has boosted demand for GCX's existing
assets. In addition, GCX's Managed Network Services segment has been awarded a
number of material new contracts during the Period and is seeing a good
pipeline of attractive new opportunities.

 

·    DNS:NET is continuing to see progress against the priorities set out
in the revised management plan with the business starting to prove that it can
successfully roll out Fibre to the Home ('FTTH') efficiently and economically.
We are pleased with the progress that management is making, particularly in
relation to penetration rates and average revenue per user ('ARPU'), which are
key areas of focus.

 

·    SRL has underperformed our expectations in the Period, driven by a
reduction in roadwork activity by Local Authorities and telecommunications
companies. We anticipate that much of the reduction in demand will be
temporary.

 

·    Ionisos has continued to experience some softness in its German
operations. In particular, the industrial cross-linking segment, which is
linked to the construction market, has been affected by the current German
macro environment. Growth in Ionisos' core, pharma-linked volumes is
materialising in line with expectations.

 

·    Our other portfolio companies are performing in line with
expectations set in March 2024.

 

·    Income in line with expectations: Total income and non-income cash in
the Period was £103 million, in line with the prior year.

 

·    FY25 dividend target: The Company is on track to deliver the FY25
dividend target of 12.65 pence per share, up 6.3% from FY24, which is expected
to be covered by net income.

 

·    Balance sheet: At 30 September 2024, the Company had available
liquidity of £306 million, including a cash balance of £1 million, and
undrawn commitments of £305 million available under its £900 million RCF.

 

 

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 its
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 2024 to 30 September 2024 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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