3i sells helicopter interest

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The Independent Online
THREE days before applications close for 3i's pounds 1.6bn flotation, the venture capital group has cashed in a 30 per cent stake in Bond Helicopters, the second-largest helicopter operator in the North Sea, for a significant profit, writes Tom Stevenson.

The sale of its stake to a Norwegian aviation business, Helikopter Service, will realise pounds 20.4m for 3i, which originally paid just pounds 37,000 for the shareholding. Bond was bought out from Fisons in 1970, when 3i made the first of 10 investments in the company. Last year it valued the investment at pounds 10.9m.

Applications for the public element of 3i's flotation close on Wednesday. The shares have been priced at 272p, putting a value of pounds 1.6bn on the business. An institutional placing was oversubscribed 2.2 times.

Conditions in the stock market forced a wider-than-expected discount to net asset value of 13.5 per cent, putting 3i in line with other venture capital investment trusts.

The disposal of 3i's holding is part of a partial takeover by Helikopter Service, which will end up with 49 per cent of Bond. The enlarged group becomes the world's largest civil helicopter operator with combined turnover of pounds 250m.

The basis of allocation of 3i's shares will be announced next Friday and first dealings are expected on Monday 18 July.

The float is expected to produce windfall profits totalling up to pounds 360m for the six banks, including the Bank of England, that own 3i.

Royal Bank of Scotland, which is selling all its 7 per cent stake, will receive pounds 116m. Barclays and Midland, roughly halving their stakes, will get about pounds 80m each.

The shareholder banks have agreed not to sell their remaining stakes for 12 months without the agreement of 3i's adviser, Baring Brothers. The 140 employees who have options for 3 per cent of the company are also expected to hold on to their shares.

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