Fairfax Africa Holdings Corp. entered into an agreement with a syndicate of underwriters led by RBC Capital Markets, Scotiabank and TD Securities Inc., under which they agreed to purchase the company's subordinate voting shares for gross proceeds of US$151 million.
Under the deal, the syndicate would buy, on a bought deal basis, 12.3 million of the company's subordinate voting shares at US$12.25 apiece. The shares will be offered in Canada by way of a prospectus supplement and on a private placement basis to U.S. persons. Underwriters have a 30-day option to purchase up to an additional 15% of the offering.
Fairfax Financial Holdings Ltd. and another institutional investor have each agreed to purchase around US$50 million of the offering, or 4.1 million shares, at the offering price.
Net proceeds will be used to acquire additional African investments and for general corporate purposes, including the repayment of debt.
The offering is expected to close on or about June 18, subject to regulatory approvals.
