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TORONTO, June 07, 2018 (GLOBE NEWSWIRE) -- Fairfax Africa Holdings Corporation ("Fairfax Africa" or the "Company") (TSX:FAH.U) has announced today that it has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets, Scotiabank and TD Securities Inc., under which the underwriters have agreed to buy, on a bought deal basis, 12,300,000 subordinate voting shares (the "Subordinate Voting Shares") at a price of US$12.25 per Subordinate Voting Share (the “Offering Price”) for gross proceeds of approximately US$151 million (the "Offering"). The Offering is expected to close on or about June 18, 2018, 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 Offering, to purchase up to an additional 15% of the Offering at the Offering Price to cover over-allotments, if any, and for market stabilization purposes.
As part of the Offering, Fairfax Financial Holdings Limited (“Fairfax”) and another institutional investor, have each agreed to purchase approximately US$50 million, respectively, of the Subordinate Voting Shares being offered in the Offering, being 4,100,000 Subordinate Voting Shares, respectively, at the Offering Price.
The Company is an investment holding company. Its investment objective is to achieve long-term capital appreciation, while preserving capital, by actively 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”). Fairfax Africa intends to use the net proceeds of the Offering to acquire additional African Investments and for general corporate purposes, including the repayment of indebtedness. Pending the allocation of such proceeds, the Company may invest the net proceeds of the Offering in certain permitted investments.
The Subordinate Voting Shares will be offered in all provinces and territories of Canada by way of a prospectus supplement to the Company’s final base shelf prospectus dated December 7, 2017 and on a private placement basis to U.S. persons (as defined in Regulation S under the U.S. Securities Act) on a strictly limited basis pursuant to Rule 144A under the U.S. Securities Act, in each case, to persons who are both (i) “qualified institutional buyers,” as such term is defined in Rule 144A, and (ii) “qualified purchasers,” as such term in defined in the Section 2(a)(51) of the U.S. Investment Company Act of 1940, as amended, and internationally as permitted. The prospectus supplement is intended to be filed on or before June 11, 2018, in each of the provinces and territories 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.
Contact Information: Fairfax Africa Holdings Corporation Guy Bentinck Chief Financial Officer and Corporate Secretary Tel: +1 (416) 646-4181
This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking statements may relate to the Company's future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividends, plans and objectives of the Company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities of the Company or the African market are forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”.
Forward-looking statements are based on the opinions and estimates of the Company as of the date of this press release, and they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the following factors: taxation of the Company and its subsidiaries; substantial loss of capital; long-term nature of investment; limited number of investments; geographic concentration of investments; potential lack of diversification; financial market fluctuations; pace of completing investments; control or significant influence position risk; minority investments; ranking of company investments and structural subordination; follow-on investments; prepayments of debt investments; risks upon dispositions of investments; bridge financings; reliance on key personnel; effect of fees; performance fee could induce Fairfax to make speculative investments; operating and financial risks of investments; allocation of personnel; potential conflicts of interest; employee misconduct at the portfolio advisor could harm the Company; valuation methodologies involve subjective judgments; lawsuits; foreign currency fluctuation; derivative risks; unknown merits and risks of future investments; resources could be wasted in researching investment opportunities that are not ultimately completed; investments may be made in foreign private businesses where information is unreliable or unavailable; illiquidity of investments; competitive market for investment opportunities; use of leverage; investing in leveraged businesses; regulation; investment and repatriation restrictions; aggregation restrictions; restrictions relating to debt securities; pricing guidelines; emerging markets; corporate disclosure, governance and regulatory requirements; legal and regulatory risks; volatility of the African securities markets; political, economic, social and other factors; governance issues risk; African tax law; changes in law; exposure to permanent establishment; enforcement of rights; smaller company risk; due diligence and conduct of potential investment entities; African economic risk; reliance on trading partners risk; natural disaster risks; government debt risk; and economic risk. Additional risks and uncertainties are described in the Company’s annual information form dated March 9, 2018 which is available on SEDAR at www.sedar.com and on the Company’s website at www.fairfaxafrica.ca . These factors and assumptions are not intended to represent a complete list of the factors and assumptions that could affect the Company. These factors and assumptions, however, should be considered carefully.
Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements contained herein, except as required by applicable securities laws.
