Fairfax Africa announces a $150 million bought deal financing
Fairfax Africa Holdings Corporation 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 at a price of US$12.25 per Subordinate Voting Share for gross proceeds of approximately US$151 million.
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 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.
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 on a strictly limited basis pursuant to Rule 144A under the U.S. Securities Act, in each case, to persons who are both “qualified institutional buyers,” as such term is defined in Rule 144A, and “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.