3i completes 700 mln stg infrastructure company IPO UPDATE

3i completes 700 mln stg infrastructure company IPO UPDATE

	Published : Thu, 08 Mar 2007 10:49 By : Agencies Print this Story

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LONDON (AFX) - Private equity firm 3i Group PLC said it has completed the listing of 3i Infrastructure Limited, an infrastructure investment company, after raising gross proceeds of 700 mln stg.

In a conference call this morning, 3i head of infrastructure Michael Queen said the raising represented the completion of the largest IPO of an infrastructure investment company in Europe to date.

'The raising of 700 mln stg also means that 3i Infrastructure will have one bln stg available to invest in infrastructure assets, as it has a debt facility for up to 50 pct of the total value of the assets it acquires,' he said.

The new company, which intends to make equity investments in infrastructure businesses and assets with an initial focus on Europe, North America and Asia, plans to invest the proceeds of the global offer over a two-year period.

Quinn, who heads the 3i infrastructure investment team that will advise the new company on investment matters, said that most of the money would go to assets outside the UK, focusing on the US, Continental Europe and India. He said that he expected the US to be the world's largest infrastructure market over the next five years.

The infrastructure managing partner said the new company has been launched with around a third of its 700 mln stg already invested, as it will acquire a 240 mln stg portfolio of mostly UK-based assets from 3i Group.

The initial portfolio will comprise an interest in substantially all of 3i's infrastructure investments, consisting of interests in Anglian Water, the fourth largest water and wastewater company in England and Wales, Infrastructure Investments LP, one of the largest UK secondary market PFI equity funds and in two other PFI projects, Norfolk and Norwich Hospital and Alpha Schools in Scotland.

The listing comes after months of investor frenzy over infrastructure assets and companies, which even prompted ratings agency S&P to recently speak of a looming infrastructure sector bubble.

While representing the largest IPO of an infrastructure investment company in Europe to date, the listing of 3i Infrastructure has not reached the original 1.3 bnl stg unofficial target. 'As a groundbreaking transaction, it was difficult to estimate a size,' Quinn said. 'We didn't really set a target, it was just a wide range.'

The company said that the shareholder base primarily comprises a large number of UK pension funds, major Middle Eastern investors and other international funds, among others.

It said conditional dealings started this morning and the listing would become effective on 13 March 2007, with a view of reaching the FTSE 250 following a review in June.

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