Canada’s Fairfax Financial raises $1b for India investment unit
Canada-based Fairfax Financial Holdings has raised $1 billion for its recently-formed India investment unit through a combination of an IPO and a private placement.
Fairfax India Holdings Corporation sold 50 million subordinate voting shares at $10 apiece in the public offering to raise gross proceeds of $500 million. If the overallotment option is fully exercised, the total would rise to $575 million, according to a regulatory filing.
As previously announced, the company also generated $300 million by issuing 30 million multiple voting shares in a private placement, with cornerstone investors picking up 20.6 million in subordinate voting shares for another $200 million. The cornerstone investors are Markel Corporation and West Street Capital Corporation, as well as funds and accounts advised by Fidelity.
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.
Fairfax Financial holds a 30.7% interest - or 28.5% if the overallotment option is fully exercised - in the India unit as a result of acquiring 30 million multiple voting shares and 660,000 subordinate voting shares in conjunction with the offering. This gives the company 95.6% of the voting rights.
Investments will be made with a view to acquiring control or significant influence positions. Fairfax Financial has previously completed three control transactions in India through its affiliate, Fairbridge Capital: Thomas Cook India, which subsequently listed; human resources services provider IKYA Human Capital Solutions; and time share and membership resort company Sterling Resorts.
Fairbridge, which was set up in 2011 and comprises a five-person team led by Harsha Raghavan, will serve as portfolio advisor to Fairfax India. It manages in excess of $680 million in Indian investments for Fairfax through the HWIC Asia Fund.
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