Electra raises £43m, agrees £185m loan

The London-listed private equity firm has said reduced competition for deals and the prevalence of distressed sellers are reasons to bolster its dry powder.

Electra Private Equity, a listed private equity investment trust, has raised £43 million (€51 million: $72 million) via an institutional share placing, the firm said.

It had informed the market on 20 July that it intended to raise up to £60 million in a forthcoming share issue.

Electra declined to comment on the results of the fundraising, but a source with knowledge of the situation said the firm felt it was “a good outcome” given the placing’s seven-day timeframe.

The cash was raised via Electra Private Equity Investments, a newly established wholly-owned subsidiary. The zero dividend preference shares (ZDPs) – placed at 100 pence each – will have an initial capital entitlement of 96.26 pence and a final capital entitlement of 155.41 pence on 5 August 2016, the firm said in a statement.

As well as the share placement, Electra agreed terms with its existing lenders for a £185 million three-and-a-half year revolving credit facility to expire in 2013. The £43 million cash injection will diversify the source and maturity of Electra’s funding and “enhance the operational flexibility of the new debt facilities”, said the firm.

Several listed private equity firms have been taking advantage of buoyancy in the public markets by raising capital. Mezzanine-focused Intermediate Capital Group (ICG) corralled £351 million from a placing in early July, while private equity firm 3i raised £732 million via a rights issue at around the same time.

Electra cited reduced competition for deals and the prevalence of distressed sellers in the current market as reasons to bolster its reserves of dry powder.

Electra Private Equity has a market cap of £362 million and is listed on the London Stock Exchange. In the last 30 days, its shares have risen in value from a low of £8.91 to £10.25 as of press time.