Fairfax India Plans Significant Normal Course Issuer Bid Initiative
Fairfax India Announces Normal Course Issuer Bid
Fairfax India Holdings Corporation (TSX: FIH.U) has recently revealed its plans to initiate a Normal Course Issuer Bid (NCIB) for its Subordinate Voting Shares. This announcement comes after receiving the Toronto Stock Exchange's (TSX) acceptance for the proposed bid, set to commence on the last day of September and run until the closing of September the following year.
Details of the Normal Course Issuer Bid
The intent behind the NCIB is clear: Fairfax India sees an opportunity to enhance the value of its Subordinate Voting Shares. With a cap of up to 5,585,509 shares earmarked for repurchase, this initiative represents roughly 10% of the public float as of the mid-September deadline.
Parameters of the Bid
According to the guidelines set by the TSX, Fairfax India may buy back up to 7,286 shares on any trading day, which is equivalent to 25% of the average daily trading volume on the exchange over the preceding six months. However, it’s noteworthy that this limitation will not affect purchases made via block purchase exemptions, allowing for greater flexibility during the repurchase process.
Why Undertake a Normal Course Issuer Bid?
Fairfax India is pursuing this NCIB because it believes that its shares represent an appealing investment opportunity. This strategic move aims not only to buy back shares but also to bolster the overall value for shareholders who retain their investments. The management feels confident that this initiative will yield positive outcomes not just for the company but also for its dedicated shareholders.
Current and Previous Share Purchases
In its previous NCIB, Fairfax India received approval to repurchase a total of 5,646,788 shares, having already acquired 552,848 shares in the last twelve months at an average price of US$13.80. This history of strategic buying underlines its commitment to enhancing shareholder value.
Introducing an Automatic Share Purchase Plan
A significant addition to this initiative is the introduction of an Automatic Share Purchase Plan (ASPP) with a designated broker. This plan is designed to facilitate share purchases during times when Fairfax India might be restricted from operating in the market due to regulatory rules or busy periods. The APSP is scheduled to take effect alongside the new NCIB.
How the ASPP Functions
Under the ASPP, Fairfax India can instruct its broker to acquire shares during the trading black-out periods, allowing for continued share repurchase activity even when the company cannot participate directly. This flexibility ensures Fairfax India can maximize its investment strategy without missing out on favorable market conditions.
About Fairfax India
Fairfax India, as an investment holding company, focuses on achieving long-term capital appreciation while safeguarding capital investments. The company is actively involved in investing across public and private equity securities as well as various debt instruments. Its investment strategy encompasses businesses that either operate directly within India or have significant connections to the Indian market.
Contact Information
For more inquiries or to further explore Fairfax India's initiatives, reach out to:
John Varnell, Vice President, Corporate Affairs
(416) 367-4755
Frequently Asked Questions
What is the purpose of the Normal Course Issuer Bid?
The NCIB aims to repurchase shares which Fairfax India believes are undervalued, enhancing the overall value for remaining shareholders.
How many shares will Fairfax India repurchase under the bid?
The company plans to repurchase up to 5,585,509 Subordinate Voting Shares during the bid period.
What is an Automatic Share Purchase Plan?
The ASPP allows Fairfax India to buy shares during times when it is restricted from trading, ensuring shares can still be repurchased continuously.
When does the Normal Course Issuer Bid begin?
The NCIB will start on September 30, 2024, and will conclude on September 29, 2025.
Why is Fairfax India utilizing the ASPP?
The ASPP provides an efficient method to conduct share buybacks without violating regulatory trading restrictions.
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