3i Infrastructure (LON:3IN) provided investors with a detailed pre-close update on March 31, its financial year-end, highlighting a major portfolio realization, a new investment, and further bolt-on acquisitions across existing holdings. Chief Financial Officer James Dawes said the company would report full-year results on May 12 and described the update as “longer than normal” given a “particularly busy few months.”
Major exit: TCR realization delivers €1.1 billion of proceeds
Dawes said the company completed the exit of its largest investment, TCR, a global lessor of airport ground support equipment. He said the sale generated proceeds of €1.1 billion and represented a 50% uplift versus the valuation at March 2025, after an exit process that he noted typically takes time in private markets.
New investment: majority stake in Norway’s Lefdal Mine Datacenter
Alongside the TCR exit, Dawes said 3i Infrastructure committed around €300 million to acquire a majority stake in the Lefdal Mine Datacenter in Norway, a data center campus located within a disused mine on the coast adjacent to a fjord. He described the site as powered by entirely renewable electricity and using fjord water for cooling, calling it among the most efficient data centers in Europe.
Dawes said the campus spans six floors, with only one currently in use, and has 80 MW of power already in place that is fully let to what he described as high-quality counterparties including financial institutions, government bodies, and university research departments. Contracts are structured as 10-year availability-based agreements, which he said provides strong downside protection. He added that the company sees growth potential, including exploring an increase to 200 MW of available power, with an initial additional 40 MW viewed as nearer-term using the existing grid connection (with some strengthening required). Dawes said the investment’s expected returns are “materially accretive” relative to 3i Infrastructure’s return target.
Bolt-on acquisitions across portfolio companies
Dawes said the company continued to deploy capital through platform companies, which he characterized as an attractive risk-return approach given 3i’s long-standing board involvement and visibility into returns. He highlighted several bolt-on transactions:
- Joulz completed two acquisitions, one from Centrica Business Solutions and one from Engie. Dawes said the Centrica deal added Italian operations and heat-related offerings, while the Engie transaction brought a sizable solar rooftop business principally in Belgium. He said the acquisitions increased Joulz’s EBITDA by about 70%.
- ESVAGT, a shipping company transitioning from offshore oil and gas toward servicing offshore wind, acquired two vessels from Edda Wind. Dawes said the vessels are existing assets already on contract, avoiding construction risk, with contracts novated to ESVAGT.
- Future Biogas acquired the Burton Agnes Renewables Plant, which Dawes said the company had already been operating but did not own. He said the move supports the strategy of shifting Future Biogas toward greater asset ownership, bringing the total to 10 plants owned (majority owned) by Future Biogas.
Capital allocation, market backdrop, and guidance
Dawes outlined the company’s capital allocation priorities following the expected TCR proceeds: first, repayment of drawings on its revolving credit facility; second, funding growth within portfolio companies; and third, investing in new pipeline opportunities such as Lefdal Mine. He said that after these steps, the company expects a pro forma net cash position of about £200 million once investments complete, adding that the company is “not in a hurry” to deploy capital and intends to maintain investment discipline in a volatile market.
On macro risks, Dawes said the company reviewed portfolio exposure to the war in the Middle East and believes the portfolio is resilient, citing infrastructure characteristics such as essential services, high barriers to entry, and inflation linkage. He added that portfolio company debt is largely fixed or hedged, with little maturing over the next three years. He also said energy generators in the portfolio can benefit from higher energy prices, though near-term power price exposure is substantially hedged.
For the year ending March 31, Dawes said 3i Infrastructure is on track to deliver its 8%–10% per annum target return, subject to final year-end valuations and residual FX exposure, and told investors guidance was likely closer to the bottom end of the range. He also said the company is on track to deliver its target full-year dividend of £0.1345 per share, a 6.3% increase on the prior year, and expects the dividend to be fully covered by net income.
DNS:NET write-down: funding conditions force expected equity value to zero
In the Q&A, Dawes addressed investor questions about DNS:NET, a fiber-to-the-home rollout investment in Germany that the company previously wrote down. He said the rollout has been more difficult than expected in Germany, particularly connecting homes, resulting in a gap where capital was invested but revenues lagged. He said 3i moved early to strengthen the management team, including appointing a new CEO and CFO, and that operational performance has improved.
However, Dawes said the investment thesis depends on continued funding—primarily debt financing—and that the debt market for German fiber rollouts deteriorated after Deutsche Glasfaser entered restructuring talks, which he described as a shock that caused new debt financing availability to “slam shut.” As a result, he said 3i was unable to raise additional debt and concluded that, given the partially built network, the value is not greater than the drawn debt, meaning the equity value is expected to be zero at year-end. He added the company continues to work with management and lenders on next steps and hopes to provide an update at full-year results, and said it does not currently expect additional liabilities beyond its equity investment.
Dawes also addressed the share price reaction, saying the share price adjusted immediately for the DNS:NET impact but that management was “disappointed” by subsequent performance, adding that he believed the benefits of the TCR exit and recent activity had not been reflected amid a difficult market backdrop.
About 3i Infrastructure (LON:3IN)
3i Infrastructure plc is a Jersey-incorporated, closed-ended investment company, an approved UK Investment Trust, listed on the London Stock Exchange and regulated by the Jersey Financial Services Commission. The Company’s purpose is to deliver a long-term sustainable return to shareholders from investing in infrastructure.
3i Investments plc, a wholly-owned subsidiary of 3i Group plc, is authorised and regulated in the UK by the Financial Conduct Authority and acts as Investment Manager to 3i Infrastructure plc.
