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Report and accounts 2006
| Group 2006 £m |
Group 2005 (as restated)* £m |
Company 2006 £m |
Group 2005 (as restated)* £m |
|
|---|---|---|---|---|
| Opening balance | 352 | 334 | 352 | 334 |
| Amortised during the year | 8 | 8 | 8 | 8 |
| Exchange movements | 5 | 10 | 5 | 10 |
| Closing balance | 365 | 352 | 365 | 352 |
* As restated for the adoption of IFRS.
On 1 August 2003, 3i Group plc issued €550 million 1.375% Convertible Bonds due 2008. The 3i share price on 1 August 2003 was 635p (31 March 2006: 941p). They are convertible at the option of the Bondholder to cash and ordinary shares at any time from 11 September 2003 to 25 July 2008. The number of shares to be issued on conversion will be determined by dividing the principal of the bond less the cash settled amount by the conversion price in effect on the conversion date. The initial conversion price is £8.416757, which has subsequently been adjusted to £8.38 following the share consolidation and special dividend in July 2005. The issuer may make a payment in cash as an alternative to issuing shares upon either conversion or redemption. Unless previously realised and cancelled, redeemed or converted, these bonds will be redeemed on 1 August 2008. Interest is payable on the bonds in equal semi-annual instalments in arrears on 12 January and 12 July each year.
On issue, part of the proceeds of the Convertible Bonds was recognised as a derivative instrument. The remaining amount is recognised as a loan and is being held at amortised cost. The effective interest rate is 4.1%. The fair value of the loan element of the Convertible Bonds is £366 million (2005: £362 million).