Fairfax issues US$300 million in shares

Fairfax Financial Holdings Ltd. announces that in its bid to buy back debt, it is issuing US$300 million, or 2.4 million in subordinate voting shares to a number of institutional investors including Southeastern Asset Management and Markel Corp. (no relation to Fairfax subsidiary Markel Insurance Co.).Southeastern will buy US$150 million in shares, while Markel will take up US$100 million. Fairfax says the offering is part of its plan to purchase or redeem outstanding indebtedness, but may also be used for general corporate purposes. “Fairfax is raising significant equity at this time because of its high priority of improving its ratings and deleveraging significantly,” explains CEO Prem Watsa. “A strong financial position with cash in excess of US$600 million after this issue is the best way to handle uncertainty in our industry and in the economy generally.”Watsa adds that Fairfax is also looking at other “opportunities for mutually beneficial transactions”, which include an eye on a “strategic alternative” for the French reinsurance subsidiary of Markel, Corifrance.