Fairfax to raise $500 mln for new African investment fund

Fairfax Financial Holdings Ltd said it expects to raise about US$500 million in equity for Fairfax Africa Holdings Corp, a new vehicle that will invest public equity, private equity and debt in African businesses. Commitments to Fairfax Africa will come from an initial public offering of subordinate voting shares, a related offering, and cornerstone investors subscribing through a US$144 million private placement. Toronto-based Fairfax, a financial holding company led by Canadian billionaire Prem Watsa, set up a comparable Indian fund in 2014.

Photo: Prem Watsa, chairman and CEO, Fairfax Financial Holdings Ltd. 

PRESS RELEASE

Fairfax Africa Prices Initial Public Offering in Connection With US$500 Million Capital Raise

TORONTO, ONTARIO–(Marketwired – Feb. 8, 2017) –

Fairfax Financial Holdings Limited (TSX:FFH)(TSX:FFH.U) (“Fairfax Financial”) and Fairfax Africa Holdings Corporation (“Fairfax Africa” or the “Company”) announce today the pricing of the Company’s previously announced initial public offering (the “Offering”) of subordinate voting shares (“Subordinate Voting Shares”). The Company has entered into an underwriting agreement for the offering of 5,622,000 Subordinate Voting Shares at a price of US$10.00 per share, for total gross proceeds of approximately US$56,220,000. In addition to the public offering of Subordinate Voting Shares, the Company will issue to Fairfax Financial directly or to one or more of its subsidiaries 30,000,000 multiple voting shares. Further, cornerstone investors have committed to subscribe for, on a private placement basis, approximately US$144 million of Subordinate Voting Shares. As a result, the aggregate equity commitment from the Offering, cornerstone investors, and Fairfax Financial, is approximately US$500 million.

“We are humbled to have received US$500 million of commitments and to close the books on the Fairfax Africa offering. I want to personally thank each and every one of the many people who worked tirelessly to get Fairfax Africa launched and also to thank all of the shareholders who have supported this new venture,” said Prem Watsa, Chairman of Fairfax Africa and Chairman and CEO of Fairfax Financial. “We aim to build value for Fairfax Africa shareholders over the longterm.”

The Company will file a final prospectus in each of the provinces and territories of Canada in connection with the Offering. The Toronto Stock Exchange (the “TSX”) has conditionally approved the listing of the Subordinate Voting Shares under the symbol “FAH.U”. Listing on the TSX, which is expected to occur upon closing of the Offering (the “Closing”), is subject to the Company fulfilling all of the requirements of the TSX. The Offering along with the other commitments are expected to close on or about February 17, 2017. The Offering is subject to customary closing conditions, including obtaining receipts from applicable securities regulatory authorities for the final prospectus.

Fairfax Africa 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 of African businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, Africa (“African Investments”). Generally, subject to compliance with applicable law, African Investments will be made with a view of acquiring control or significant influence positions.

Fairfax Financial has taken the initiative to create the Company. Fairfax Financial is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

RBC Capital Markets is acting as Global Coordinator for the Offering in Canada and the United States. RBC Capital Markets, Citigroup and UBS are acting as Joint Global Coordinators and bookrunners for the Offering in EMEA and elsewhere outside of Canada and the United States. RBC Capital Markets, Citigroup, UBS, BMO Capital Markets, CIBC Capital Markets, National Bank Financial Inc., Scotiabank and TD Securities Inc. are acting as joint bookrunners for the Offering in North America, with Canaccord Genuity Corp., Cormark Securities Inc., Desjardins Capital Markets, GMP Securities L.P., Raymond James Ltd., Dundee Capital Partners and Manulife Securities Incorporated acting as co-managers.

The Company granted the underwriters a 30-day option to purchase up to an additional 15% of the aggregate number of Subordinate Voting Shares issued under the Offering to cover over-allocations, if any, and for market stabilization purposes.

 

Contact Information

Fairfax Financial Holdings Limited
Paul Rivett
President
(416) 367-4942

Fairfax Africa Holdings Corporation
Michael Wilkerson
Chief Executive Officer
(416) 367-4941

Photo courtesy of Reuters/Aaron Harris