3i Group PLC Covid-19 update and Action Seminar (7254G)
19 Marzo 2020 - 02:30AM
UK Regulatory
TIDMIII
RNS Number : 7254G
3i Group PLC
19 March 2020
Press release
19 March 2020
3i Group plc
Update on Covid-19 and
Action Capital Markets Seminar
3i Group plc ("3i" or "the Group") will be holding a Capital
Markets Seminar this morning, involving a presentation from the
management team of Action. Presentation materials will be made
available on 3i's website ( www.3i.com ), and a copy of the
transcript will be published when it is available.
Since 3i published its performance update for the nine months to
31 December 2019 on 30 January 2020, the global impact of Covid-19
on public health, business, financial markets, and governments'
responses has developed rapidly. This further update provides a
brief summary of the current status of 3i's balance sheet position
and our Private Equity portfolio ahead of the valuation of the
portfolio as at 31 March 2020.
3i Group balance sheet
3i has had a conservative balance sheet strategy since its
restructuring in 2012. It has two long-dated bonds (GBP200 million,
maturing in 2023, and GBP375 million, maturing in 2032) which have
no financial covenants. On 13 March 2020, we completed the
refinancing of our Revolving Credit Facility ("RCF"), increasing
its amount from GBP350 million to GBP400 million in a five year
facility with an option to extend annually for a further two years.
The cost of the facility, which has no financial covenants, was
also reduced. At 31 March 2020, we expect our cash balance to be
c.GBP800 million before the payment of carry in respect of the
Action liquidity event due in May 2020; there are currently no
plans to draw on our RCF.
Private Equity portfolio
We completed our semi-annual portfolio company review meetings
of the substantial majority of our top 20 investments (which at 31
December accounted for 97% of the total Private Equity portfolio
value) in the week commencing 9 March 2020. Although the situation
is very fluid, the majority of our portfolio is expected to
experience a modest short-term disruption to its business,
principally as a result of the country by country lockdowns. A
small number of other companies are more directly and significantly
affected, at least in the short term. These include Action,
BoConcept and Hans Anders in the retail sector, and Audley Travel
and ICE in the travel sector. Basic-Fit, in which we have a 13%
stake, has also seen a significant decline in its share price.
An update on Action's performance for 2019, and the current
status of the impact of Covid-19 on the business will be provided
at the seminar this morning.
More generally, we are focused on working with our portfolio
companies to support them through these unprecedented times. The
weighted average net debt of the portfolio at 31 December 2019 was
4.0x excluding Action.
Private Equity investments and realisations
We invested GBP471 million in the nine months to 31 December
2019, including new investments in Magnitude Software, Evernex, and
the new bioprocessing platform. We have recently seen a number of
new investment processes being postponed in light of the current
environment. We are focusing our efforts on supporting our
portfolio companies to deal effectively with the Covid-19
situation.
On 5 December 2019, we announced the signing of an
implementation agreement to dispose of our investment in ACR. We
received final approvals to complete this transaction. Proceeds are
subject to a number escrow arrangements; we expect to receive the
first tranche of c.$136 million in Q3 2020.
We have also signed an agreement to sell another portfolio
company for proceeds of up to EUR96 million, which will be
announced in due course and is expected to complete later this
year.
Portfolio valuation at 31 March 2020
For some time, we have had a policy of taking a longer-term
approach to the multiples used to value our portfolio. This has
meant that, in recent years, we have typically used multiples lower
than those prevailing for comparable quoted companies. As a result,
we have been able to mitigate the impact of market volatility in
the past. Although the valuation of our portfolio will depend on
market multiples and outlook as at 31 March 2020, the significant
and continuing falls in equity markets will put more pressure on
the multiples that we will use to value the portfolio as at that
date, particularly for those portfolio companies currently most
directly exposed to the impact of Covid-19.
- Ends-
For further information, contact:
3i Group plc
Silvia Santoro Tel: +44 20 7975 3258
Investor enquiries Email: silvia.santoro@3i.com
Kathryn van der Kroft Tel: +44 20 7975 3021
Media enquiries Email: kathryn.vanderkroft@3i.com
Notes to editors:
About 3i Group
3i is a leading international investment manager focused on
mid-market Private Equity and Infrastructure. Our core investment
markets are northern Europe and North America.
For further information, please visit: www.3i.com .
Appendix 1 - Top 20 investments
Company Value at Dec 19
GBPm
--- ------------------ ----------------
1 Action 3,461
3i Infrastructure
2 plc 791
3 Scandlines 464
4 Cirtec Medical 256
5 Hans Anders 249
6 Q Holding Inc 245
7 WP 237
8 Audley Travel 217
9 Evernex 206
10 Aspen Pumps 203
11 Basic Fit 198
12 Smarte Carte 183
13 Havea 180
14 AES 179
15 Formel D 177
16 Royal Sanders 170
17 Regional Rail 163
18 ICE 159
19 Tato 158
20 Boconcept 149
Top 20 by NAV 8,045
--- ------------------ ----------------
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END
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