Background: This morning, 3i Infrastructure announced that it has signed an agreement to syndicate a 27% stake in TCR to 3i Zephyr, a co-investment vehicle managed by 3i Investments, the company’s investment manager, and funded by six institutional investments. Investec view: The syndication of its investment in TCR had been flagged in 3IN’s interim results (see our note here) and the transaction, once completed, will reduce the company’s portfolio concentration and allow it to repay some of the drawn balance on the RCF. 3IN’s holding in TCR will decrease from c.96% to c.69% for proceeds of c.€220m (c.£193m at current FX), in line with the valuation of the incremental stake acquired by 3IN on 31 October 2022. The co-investment vehicle will be managed by 3i Investments and therefore management will maintain its governance position. The company has outlined that the proceeds will be used to repay part of the company’s outstanding RCF balance, which we estimate is currently drawn by c.£668m (c.23% of NAV). Following receipt of the proceeds (the syndication is expected to complete later this quarter), the drawn balance on the RCF will reduce to c.£475m (c.16% of NAV). 3IN has access to a £900m RCF with a maturity date of November 2025 and therefore will have c.£425m available under this facility. The transaction will also reduce the portfolio concentration; TCR currently comprises c.19% of portfolio value and, following completion, this will reduce to c.14%. The 3IN share price experienced a sharp fall immediately following the ‘mini-budget’, however we note that the shares have recovered in recent weeks and are now trading around the levels prior to 23 September 2022, and on a small premium to our eNAV. TCR: TCR is a leading global provider of Ground Support Equipment (GSE) rental solutions and services, supporting air industry customers in their ground handling processes. The business is present in over 160 airports (compared with 100 at acquisition in 2016), with more than 30,000 GSE assets in its rental fleet (compared with 23,000 at acquisition). In its recent interim results, management commented that it believes TCR is well positioned in the post-pandemic environment and is experiencing increasing demand for its full-service rental model. During the six-month period to 30 September 2022, TCR’s revenues increased as utilisation and traffic continued to recover, and management signed a number of new contracts and contract extensions.