Fairfax Africa Holdings Corporation
TSX : FAH.U

Fairfax Africa Holdings Corporation

April 27, 2017 17:13 ET

Fairfax Africa Holdings Corporation: First Quarter Financial Results

TORONTO, ONTARIO--(Marketwired - April 27, 2017) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

(Note: All dollar amounts in this news release are expressed in U.S. dollars, except as otherwise noted. The financial results are prepared using the recognition and measurement requirements of International Financial Reporting Standards except as otherwise noted, and are unaudited.)

Fairfax Africa Holdings Corporation (TSX:FAH.U) announces net earnings of $0.6 million in the first quarter of 2017 ($0.02 per basic and diluted share). Book value per basic share was $9.76 at March 31, 2017.

Highlights in the first quarter of 2017 included the following:

  • Fairfax Africa completed an initial public offering and private placements on February 17, 2017 and an over-allotment option on March 2, 2017 raising total net proceeds of $493.3 million after issuance costs and expenses from its offerings. These proceeds included a $75.0 million in-kind contribution of an indirect interest investment in AFGRI Holdings Proprietary Limited.
  • Fairfax Financial Holdings Limited purchased all of the multiple voting shares of Fairfax Africa for $300.0 million, constituting a controlling interest.
  • Subsequent to its initial public offering, Fairfax Africa, pending identifying and completing longer term investments in African businesses, invested most of the net proceeds of the offerings in permitted investments. At March 31, 2017, Fairfax Africa held $299.3 million of cash and cash equivalents and permitted investments of $142.7 million.
  • At March 31, 2017, common shareholders' equity was $494.0 million.

There were 24,117,202 weighted average shares outstanding during the first quarter of 2017.

At March 31, 2017 there were 20,620,189 subordinate voting shares outstanding in addition to 30,000,000 multiple voting shares outstanding for a total of 50,620,189 common shares effectively outstanding.

Fairfax Africa's detailed first quarter report can be accessed at its website: www.fairfaxafrica.ca

The Company is an investment holding company. Its investment objective is to achieve long-term capital appreciation, while preserving capital, by investing in public and private equity securities and debt instruments in Africa and African businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, Africa. Generally, subject to compliance with applicable law, African investments will be made with a view to acquiring control or significant influence positions.

This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking statements may relate to the company's future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividends, plans and objectives of the company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities of the Company or the African market are forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved".

Forward-looking statements are based on the opinions and estimates of the company as of the date of this press release, and they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the following factors: taxation of the company and its subsidiaries; substantial loss of capital; long-term nature of investment; limited number of investments; geographic concentration of investments; potential lack of diversification; financial market fluctuations; pace of completing investments; control or significant influence position risk; minority investments; ranking of company investments and structural subordination; follow-on investments; prepayments of debt investments; risks upon dispositions of investments; bridge financings; reliance on key personnel; effect of fees; performance fee could induce Fairfax to make speculative investments; operating and financial risks of investments; allocation of personnel; potential conflicts of interest; employee misconduct at the portfolio advisor could harm the company; valuation methodologies involve subjective judgments; lawsuits; foreign currency fluctuation; derivative risks; unknown merits and risks of future investments; resources could be wasted in researching investment opportunities that are not ultimately completed; investments may be made in foreign private businesses where information is unreliable or unavailable; illiquidity of investments; competitive market for investment opportunities; use of leverage; investing in leveraged businesses; regulation; investment and repatriation restrictions; aggregation restrictions; restrictions relating to debt securities; pricing guidelines; emerging markets; corporate disclosure, governance and regulatory requirements; legal and regulatory risks; volatility of the African securities markets; political, economic, social and other factors; governance issues risk; African tax law; changes in law; exposure to permanent establishment; enforcement of rights; smaller company risk; due diligence and conduct of potential investment entities; African economic risk; reliance on trading partners risk; natural disaster risks; government debt risk; and economic risk. Additional risks and uncertainties are described in the company's annual information form dated March 31, 2017 which is available on SEDAR at www.sedar.com and on the company's website at www.fairfaxafrica.ca. These factors and assumptions are not intended to represent a complete list of the factors and assumptions that could affect the company. These factors and assumptions, however, should be considered carefully.

Although the company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The company does not undertake to update any forward-looking statements contained herein, except as required by applicable securities laws.

Contact Information

  • Fairfax Africa Holdings Corporation
    Guy Bentinck
    Chief Financial Officer and Corporate Secretary
    (416) 646-4181