Fairfax India Holdings Corp (TSX: FIH.U), an affiliate of Fairfax Financial Holdings Ltd, has launched a US$150 million bought deal financing and a US$350 million concurrent private placement. The Ontario Municipal Employees Retirement System (OMERS) will acquire about 17 million subordinate voting shares as part of the latter offering, which is expected to close in January. Fairfax India was set up in 2014 to make private equity, public equity and debt investments in India. Its recent private deals include April’s US$300 million invested in Sanmar Chemicals Group.
Fairfax India Announces A US$150 Million Bought Deal Financing and A US$350 Million Concurrent Private Placement
TORONTO, ONTARIO–(Marketwired – Dec. 14, 2016) –
Fairfax India Holdings Corporation (“Fairfax India” or the “Company”) (TSX:FIH.U) has announced today that it has entered into an agreement with a syndicate of underwriters co-led by RBC Capital Markets, Scotiabank and TD Securities Inc., under which the underwriters have agreed to buy, on a bought deal basis, 12,766,000 subordinate voting shares (the “Subordinate Voting Shares”) at a price of US$11.75 per Subordinate Voting Share for gross proceeds of approximately US$150 million (the “Public Offering”). Concurrent with the Public Offering, Fairfax Financial Holdings Limited (“Fairfax”) and OMERS, the pension plan for Ontario’s municipal employees, will acquire 12,766,000 Subordinate Voting Shares and 17,021,500 Subordinate Voting Shares, respectively, at a price of US$11.75 per Subordinate Voting Share in a concurrent private placement (together with the Public Offering, the “Offerings”). The Offerings are expected to close on or about January 13, 2017, subject to the Company obtaining all regulatory approvals.
The Company has granted the underwriters an option, exercisable, in whole or in part, at any time until and including 30 days following the closing of the Public Offering, to purchase up to an additional 15% of the Public Offering at the offering price to cover over-allotments, if any, and for market stabilization purposes.
The Company is an investment holding company. Its investment objective is to achieve long-term capital appreciation, while preserving capital, by investing in public and private equity securities and debt instruments in India and Indian businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on India (“Indian Investments”). Fairfax India intends to use the net proceeds of the Offerings to acquire additional Indian Investments and for general corporate purposes, including the repayment of indebtedness. Generally, subject to compliance with applicable law, Indian Investments will be made with a view to acquiring control or significant influence positions. Pending the application of such proceeds, the Company may invest the net proceeds of the Offerings in certain permitted investments.
The Subordinate Voting Shares that form part of the Public Offering will be offered in all provinces of Canada by way of a short form prospectus and on a private placement basis in the United States to Qualified Institutional Buyers who are Qualified Purchasers pursuant to Rule 144A and internationally as permitted. The preliminary short form prospectus is intended to be filed on or before December 20, 2016, in each of the provinces of Canada.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This press release is not an offer of securities for sale in the United States, and the securities may not be offered or sold in the United States absent registration or an exemption from the registration requirements. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended.
Fairfax India Holdings Corporation
Vice President, Corporate Affairs
Photo courtesy of Reuters/Vivek Prakash