3i Infrastructure PLC (LON:3IN) has agreed to sell its stake in UK water supplies company Anglian Water Group.
The stake will be sold to a consortium of Dalmore Capital and GLIL Infrastructure LLP, an investment joint venture between five local government pension funds.
'Appropriate time to realise its stake'
3i expects gross proceeds of about £395mln from the deal, compared to a valuation of £288mln at 30 September.
The company bought the interest in Anglian Water in 2007 upon its initial public offering in 2007, after it was taken private in 2006 by a consortium of investors.
3i said since its acquisition, Anglian Water has invested more than £4bn to replace ageing infrastructure, improve resilience and address the imbalance between supply and demand in one of the UK's driest regions.
"AWG was part of 3i Infrastructure's seed portfolio and has proved a good investment for the Company over the past ten years,” said 3i chairman Richard Laing.
“We believe that now is an appropriate time for the company to realise its stake.”
Considering returning surplus cash to shareholders
The news comes less than a week after 3i said it was selling Elenia Oy – the Finnish power grid company it owns with Goldman Sachs Infrastructure Partners and Finnish pensions insurance firm Ilmarinen – to Allianz Capital Partners, Australian infrastructure investor Macquarie and the State Pension Fund of Finland.
Following completion of the sale of Elenia and its stake in Anglian Water, the company expects to have a “significant” cash balance by the end of the first quarter of 2018.
“Consistent with our policy of managing our balance sheet efficiently, the board of directors will be considering the potential for returning surplus cash to shareholders," said Laing.
Shares gained 2.27% to 207.50p in morning trading.