Fairfax Pushes IPO for Canadian Ops

Fairfax Financial Holdings Ltd. (TSX: FFH) says a preliminary prospectus for an initial public offering (IPO) of common shares of Northbridge Financial Corp., a Canadian insurance holding company, has been filed. It is intended that Northbridge would become the listed holding company for Fairfax’s Canadian operations of Lombard, Commonwealth, Markel and Federated.

Based on returns for the 2002 financial year, the companies that would fall under Northbridge had total assets of $3.26 billion and shareholders’ equity of $562.8 million. The only debt is a small non-recourse mortgage on real estate, the company reports. Last year, the group saw gross written premiums of $1.78 billion, and an overall combined ratio of 97.4%. The group’s average return on equity (ROE) was 10.3%.

Current Lombard president Byron Messier is set to step up as CEO of Northbridge.

“Fairfax believes that this offering will allow its Canadian subsidiaries to take advantage of the growth opportunities available to them in the improving Canadian insurance marketplace, thereby realizing benefits similar to those which accrued to Fairfax’s Odyssey Re subsidiary following its IPO in 2001,” states a Fairfax release.