3i cash raising efforts see it halve its debt

<div>3i GROUP, the listed private equity giant, said yesterday it had managed to cut its debt in half over the last three months as it offloaded assets and completed a heavily-discounted rights issue.<br /><br />The &pound;732m raised in the rights issue &ndash; where existing shareholders were offered bargain-priced shares as the group scrambled to raise cash &ndash; helped it to slash the net debt to &pound;961m by the end of June, compared to &pound;1.9bn at the end of March.<br /><br />The liquidation of the 3i Quoted Private Equity (3iQPE) subsidiary fund aided the debt cuts, the group said. Sales of assets produced &pound;163m in total during the quarter, exceeding the amount spent on making new investments by &pound;87m.<br /><br />&ldquo;Our focus in the first quarter was on strengthening the balance sheet,&rdquo; chief executive Michael Queen said. &ldquo;A substantial increase in liquidity and the reduction in net debt provide further resilience in what remains a fragile environment.&rdquo;<br /><br />Private equity firms have seen the value of their investments slump as falling revenues and shaky outlooks hit company valuations.<br /><br />And new deals have come to a virtual halt as the debt required to fund them has dried up.<br /><br />Oriel Securities analyst Iain Scouller said the leverage position of 3i has improved significantly.<br /><br />&ldquo;It is now roughly equivalent to 35 per cent of the total value of its assets, compared to 103 per cent in March,&rdquo; he said.<br /><br />In a separate statement, 3i said the recently-named chairman of electronics retailer DSG International, John Allan, would be joining the board as a non-executive director from September.<br /><br />And Alistair Cox, chief executive of Hays, is joining board as part of the group&rsquo;s ongoing revamp.</div>