3i infrastructure fund goes into oil tank storage(3)

3i said today it had already invested half of the £700 million listed infrastructure fund it raised in March, after buying a minority stake in three oil tank storage operations.

3i’s listed infrastructure fund has bought a 45 percent stake in three subsidiaries of German storage group Oiltanking for €305 million ($419 million), the first solo deal it has completed since it floated in March.

3i Infrastructure has bought a 45 percent stake in the Singapore, Amsterdam and Malta operations of German group Oiltanking, which provides oil tank storage services to oil companies, refineries and chemicals companies. The UK-listed group is contributing a €115 million equity cheque, while RBC Capital Markets is supplying a €190 million debt facility.

It is the first big solo deal done by the fund since it raised £700 million by floating the infrastructure fund on the London Stock Exchange four months ago, although there have been some minor acquisitions through Infrastructure Investments, an old 3i asset that was rolled over into the listed fund. Taking into account this deal and other investments rolled over from 3i’s main fund – including a stake in UK group Anglian Water – the fund has now committed more than half of the IPO proceeds.

3i said Singapore and Amsterdam were two of the leading hubs for oil trading, while Malta lay at the heart of the Mediterranean trade route. Director Alistair Ray will sit on the board of the three units, which will continue to be run by the current management team.

Peter Sedgwick, chairman of 3i Infrastructure, said the sector had attractive growth prospects: “There is significant projected growth in sea, air, truck, rail and car transportation to underpin demand for petroleum products into the foreseeable future.”

The deal should complete this month, assuming it is not blocked by the German Federal Cartel Office.

The 3i Group took a stake of about 46 percent in the £700 million infrastructure fund when it floated in March. The fund, which had been hoping to raise as much as £1.3 billion, aims to provide returns of about 12 percent to shareholders once fully invested.

The fund sold 700,000 shares at 100 pence each in March. It is currently trading down from its offer price, with stock changing hands for 98.5 pence this afternoon.