3i: Rights Issue 96.6% Subscribed

LONDON (Reuters) – British private equity firm 3i (III.L) on Friday announced a near-total shareholder take-up of its heavily-discounted 732 million pounds ($1.2 billion) rights issue aimed at strengthening its balance sheet.

The company said 96.6 percent of shareholders subscribed to the capital raising, part of chief executive Michael Queen’s plans to halve 3i’s debt pile.

“I think people see it as a good way of getting exposure to that type of company fairly easily. There is a lot more enthusiasm today for this type of stock than there was six months ago,” said Iain Scouller at Oriel Securities.

Net of fees and costs, 700 million pound remained for the company, 3i said.

The company posted a 2.15 billion pound loss in the year to end-March, hit by a mixture of falling revenues in companies they own, tumbling portfolios valuations and tight liquidity.

3i shares were up 2 percent at 278.25 pence at 0934 GMT in a slightly weaker overall market. The stock has steeply recovered from a trough at 110 pence in March.

The share sale brings 3i’s total liquidity to 1.8 billion pounds, the group said.

The company said it placed 523 million out of 542 million new shares offered at 135 pence — a 60 percent discount to the close on May 7, the day before it announced the nine-for-seven offer.

Rights issues this year have had average take-up rates of 93.4 percent, a spokesman for the company said.

The unsubscribed rump issue of 18.6 million shares would be sold at 277 pence each, the company said. The rump issue was over-subscribed, a banking source told Reuters.

JP Morgan Cazenove and Merrill Lynch International were joint book-runners on the sale.

By Cecilia Valente