Proposed rights issue

08 May 2009

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, CANADA, OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. THEY ARE NOT AN OFFER OF SECURITIES FOR SALE NOR A SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, OR CANADA. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

The Board of Directors of 3i today announces an underwritten Rights Issue to raise approximately £700 million (net of expenses).

Highlights

  • 9 for 7 underwritten Rights Issue to raise approximately £700 million (net of expenses) through the issue of 542,060,391 New Ordinary Shares at 135 pence per New Ordinary Share, at a discount to the theoretical ex-rights price of 39.8% when calculated by reference to the closing price of 339 pence per Ordinary Share on 7 May 2009 (being the last business day before the announcement of the terms of the Rights Issue)

  • The Board believes that the proposed Rights Issue will enable it to:

- build on the actions it has taken, and will continue to take, to reduce 3i's net debt and strengthen its balance sheet
- continue to pace the realisation of its existing portfolio investments in order to gain the benefit of their full potential 
- take advantage of new investment opportunities

  • With pro forma net debt of £1.1 billion as at 31 March 2009, after taking account of the Rights Issue and the other action the Board has taken, 3i's balance sheet will be considerably stronger than prior to the Rights Issue
  • This strengthened capital structure which will further support 3i's investment grade credit rating should not only facilitate 3i's access to debt capital markets but should also help to strengthen its market position

  • The Board therefore believes that 3i's access to financing, flexibility over the timing of realisations and new investments, competitive position, and overall ability to fulfil its potential will all benefit as a result of the proposed Rights Issue, which in its view is in the best interests of its shareholders

Michael Queen, Chief Executive of 3i, said:

"This rights issue builds on a number of actions we have been taking. It will strengthen not only our balance sheet but also our market position and will position us well to take advantage of investment opportunities as they emerge"

J.P. Morgan Cazenove and Merrill Lynch are acting as Joint Global Coordinators, Joint Bookrunners and Joint Sponsors. J.P. Morgan Cazenove is acting as Lead Financial Adviser to the Rights Issue. Rothschild is acting as Financial Adviser to the Company.

Analyst presentation

A meeting for analysts and investors will be hosted at 3i's offices. The details of the meeting are as follows:

Venue: 16 Palace Street, London SW1E 5JD
Date & Time: 8 May 2009 at 9.00am (London time)
Registration will commence at 8.45am (London time)

Expected timetable

Each of the times and dates in the table below is indicative only and may be subject to change.

Expected publication of the Prospectus and Circular 8 May 2009
General Meeting 9.30 a.m. on 27 May
Dealings in New Ordinary Shares, nil paid, commence on the London Stock Exchange 8:00 a.m. on 28 May
Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters 11:00 a.m. on 11 June
Dealings in New Ordinary Shares, fully paid, commence on the London Stock Exchange 8:00 a.m. on 12 June

Note: References to the times in this timetable are to London times

This summary should be read in conjunction with the full text of this announcement.

A Prospectus containing details of the Rights Issue will be available shortly on the Group's website. A Circular convening the General Meeting is expected to be posted to shareholders shortly.

For more information, please contact:

3i Group plc
Patrick Dunne, Group Communications Director - 020 7975 3242

J.P. Morgan Cazenove
Naguib Kheraj, Ian Hannam, Andrew Hodgkin -  020 7588 2828

Merrill Lynch
Mark Astaire, Rupert Hume-Kendall -  020 7996 1000

Rotschild
Nigel Higgins, John Deans, Adam Young -  020 7280 5000

Shareholder enquiries

If you have questions on the Rights Issue, please telephone the Shareholder Helpline on the numbers set out below. This helpline is available from 8 May 2009, Monday to Friday (8:30 a.m. to 5:30 p.m.) (excluding bank holidays), and will remain open until 3 July 2009.

Calls cost 8p per minute if calling from a BT Landline within the UK. Other telephone providers' costs may vary and calls from mobiles may be considerably higher.

Shareholder Helpline telephone numbers:

 0871 384 2232 (from inside the UK) or  +44 121 415 7187 (from outside the UK).

Please note that the Provisional Allotment Letters and a shareholder guide to completing a Provisional Allotment Letter will not be posted to Qualifying Shareholders until 27 May 2009, subject to the passing of the Resolutions at the General Meeting. Please also note that, for legal reasons, the Shareholder Helpline will only be able to provide information contained in the Prospectus and information relating to 3i's register of members and will be unable to give advice on the merits of the Rights Issue or to provide financial, tax or investment advice.