Private equity firm 3i has confirmed it is mulling a cash call to shareholders as part of moves to shrink its debt mountain.
The company is evaluating a range of financing options, including the potential issue of new shares.
Reports claimed the 3i board was meeting today to discuss plans to raise between £500?million and £700?million in a rights issue.
3i’s biggest shareholders, including Schroders, M&G and Legal & General Investment Management, are likely to be approached this week about the plan.
A cash call would allow 3i to cut its net debt, which reached £2.1?billion at the end of last year, as well as provide it with capital to invest at a time when company valuations have been falling.
The potential issue of new shares had an impact on 3i’s share price, which was down 14 per cent yesterday.
Other large companies including HSBC, Land Securities and Xstrata have also asked investors for billions of pounds of cash this year.