Canada's Fairfax Financial launches India investment unit
Fairfax Financial Holdings, which previously acquired Thomas Cook India through Fairbridge Capital, is launching a publicly-traded unit that will target investments in the country.
In addition to the public offering of subordinate voting shares, the unit - Fairfax India Holdings - will issue 30 million multiple voting shares at $10 apiece to Fairfax Financial through a private placement for $300 million, according to a regulatory filing. Cornerstone investors have agreed to commit a further $200 million in subordinate voting shares.
The cornerstone investors are Markel Corporation and West Street Capital Corporation, as well as funds and accounts advised by Fidelity Management & Research and Fidelity Worldwide. The filing does not indicate the size and pricing of the public offering.
Fairfax India is described as an investment holding company with an investment objective to achieve long-term capital appreciation, while preserving capital, through the purchase of public and private equities and debt instruments in India and Indian businesses, and companies with substantial exposure to the country.
Fairbridge, which was set up in 2011 and comprises a five-person team lead by Harsha Raghavan, will be appointed as portfolio advisor to Fairfax India. It manages in excess of $680 million in Indian investments for Fairfax through the HWIC Asia Fund and has also advised the group on several buyouts in the country.
In 2012, Fairfax - acting on the advice of Fairbridge - bought an 87% stake in the Indian arm of Thomas Cook, the second-largest holiday maker in Europe, for INR8.17 billion ($150 million). Last year it took the business public, raising INR1.85 billion and reducing its holding to 75%, in accordance with local securities regulations.
Fairfax has also acquired majority interests in human resources services provider IKYA Human Capital Solutions and Sterling Resorts, a time share and membership resort company.
"We believe India will be transformed by the business-friendly government of Prime Minister Modi - and Fairfax India, with our resources and expertise in India developed over the last 14 years, will be well positioned to make excellent significant long-term investments in businesses with experienced and ethical management teams," Prem Watsa, chairman of Fairfax Financial and Fairfax India, said in a statement.
Canada-based Fairfax Financial is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. It is has a market capitalization of around $9.5 billion, assets of around $37.3 billion, and revenues over the last 12 months of more than $9.6 billion.
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