3i considering £700m rights issue

3i, Britain’s biggest publicly-listed private equity and venture capital specialist, is considering a rights issue, it said yesterday. The company, which is under pressure to reduce its debts, which were £2.1bn at the end of last year, said it was “considering a range of financing options including the potential issue of new equity”.

The company is thought to be considering raising as much as £700m through a deeply-discounted offer and could announce the issue next month, when it is due to publish it latest set of results.

However, 3i has not made a final decision about the rights issue and it is understood that it has yet to hold formal discussions about the fund-raising with its leading shareholders.

Like other private equity businesses, 3i has seen the value of many of its investments fall sharply over the past year, though its own share price has staged something of a recovery in recent months.

The company is now lead by Michael Queen, who became chief executive in January, replacing Philip Yea.