Fairfax India Enhances Credit Facilities for Growth Strategy
Amendment of Credit Agreement by Fairfax India
Fairfax India Holdings Corporation recently announced a significant modification to its credit agreement with a group of lenders. The purpose of these amendments is twofold: first, it allows for the issuance of letters of credit under its revolving credit facility, and second, it raises the borrowing limit of the facility from $175 million to $250 million, with a planned reduction to $175 million over the next eighteen months.
Details of the New Credit Agreement
Under the revised terms, effective from December 31, 2024, Fairfax India maintains flexibility in utilizing its revolving credit facility, which was undrawn as of year-end. This strategic move is crucial as it supports the company’s liquidity and financial planning, allowing for future investments without jeopardizing cash flow.
Strategic Acquisition of Bangalore International Airport
In conjunction with the revised credit agreement, Fairfax India has disclosed plans to acquire an additional 10% equity interest in Bangalore International Airport Limited (BIAL). This acquisition is part of the company's strategy to deepen its investments in pivotal Indian infrastructure projects.
Financial Commitment and Installments
The total purchase price for this acquisition amounts to $255 million, to be paid in three installments. The initial payment of $84.2 million is set to occur on the closing date of the transaction, expected within the first quarter of 2025. Subsequent payments totaling approximately $170.9 million will occur in August 2025 and July 2026. To provide security for these payments, Fairfax India will issue a letter of credit in favor of Siemens Project Ventures GmbH, which will expire in September 2026.
About Fairfax India Holdings Corporation
Fairfax India is an investment holding company primarily aimed at long-term capital appreciation. Its investment portfolio is diverse, targeting both public and private equity as well as debt instruments in India and businesses with strong ties to the Indian market.
Impact on Future Operations
This amendment to the credit agreement and the planned acquisition reflect Fairfax India's commitment to expanding its operational footprint in India. It showcases the company’s strategic focus on infrastructure, which is essential for supporting the country’s economic growth.
Company Contact Information
For any inquiries regarding this announcement, interested parties can reach out to John Varnell, Vice President of Corporate Affairs, at (416) 367-4755.
Frequently Asked Questions
What is the importance of the credit agreement amendment?
The amendment enhances Fairfax India's financial flexibility, allowing it to issue letters of credit and increase its borrowing limit, crucial for future investments.
What does the acquisition of BIAL imply for Fairfax India?
The acquisition solidifies Fairfax India's stake in vital infrastructure and enhances its investment strategy in the growing Indian economy.
When are the payments for the BIAL acquisition due?
The purchase price is payable in three installments, with the first payment due at closing, followed by two deferred payments in 2025 and 2026.
How will Fairfax India secure the payment for BIAL?
The company will provide a letter of credit to Siemens covering the deferred purchase price, ensuring payment security for the transaction.
Who can I contact for more information about Fairfax India?
For further information, you can contact John Varnell, Vice President of Corporate Affairs, at (416) 367-4755.
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