Fairfax seeks Canadian regulator's nod to infuse up to $1.5 bn in India

Fairfax invests in businesses that are expected to benefit from India’s pro-business political environment
Fairfax India Holdings Corporation has made regulatory filings with the Canadian securities regulator, as it seeks to offer up to $1.5 billion as debt, equity or other securities over a 25-month period.

The company has filed a final short form base shelf prospectus with the Canadian securities regulatory authorities in connection with its $1.5 billion universal shelf renewal. 

"The shelf prospectus renewal allows Fairfax India to offer from time to time over a 25-month period up to $1.5 billion of debt, equity or other securities," the company said. "Should Fairfax India offer any securities, it will make a prospectus supplement available that will include the specific terms of the securities being offered."

Fairfax invests in businesses that are expected to benefit from India’s pro-business political environment, its growing middle class and its demographic trends that are likely to underpin strong growth for several years. Sectors of the Indian economy that it believes will benefit most from such trends include infrastructure, financial institutions, consumer services, retail and exports, though it is not limiting its investments into these sectors.

The company said that its net earnings for the year 2019 grew five-fold to $516.3 million, from $96.4 million for the year 2018, reflecting increased net undrealised and realised gains on investments. This was partially offset by increased tax expense and performance fees. Its book value per share has seen an 11.2 per cent compounded annual growth rate during the period. 

The increase primarily related to the fiscal year 2019 net earnings, partially offset by unrealised foreign currency translation losses as a result of the weakening of the Indian rupee relative to the US Dollar.

The Company also announced a net change in unrealised gains on investments of $530.4 million in February, mainly from an increase in the fair value of its investments in Bangalore International Airport ($751.5 million) and Sanmar Chemicals Group ($23.1 million), and an increase in the market prices of its investments in the Catholic Syrian Bank Limited ($60.9 million) and Fairchem Specialty Limited ($33.4 million). 

This was partially offset by a decrease in the market prices of the investments in IIFL Finance Limited ($196.0 million) and IIFL Securities Limited ($40.9 million) and a decrease in the fair value of the investment in National Collateral Management Services Limited ($41.6 million).

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