Fairfax issues $300-million worth of voting shares

Fairfax Financial Holdings Limited (TSX:FFH.SV)(NYSE:FFH) has agreed to issue $300-million worth of subordinate voting shares (1,843,318 shares) to a number of institutional investors at today’s closing price of $162.75 per share.
Prem Watsa, CEO of Fairfax, commented: “Fairfax is raising significant equity at this time with a view to bulletproofing its balance sheet and achieving the financial flexibility that has been its hallmark in the past. With the huge projected hurricane Katrina losses for the industry, we believe the industry dynamics may well be good again.
“We believe raising this significant equity should continue to improve our ratings and deliver our balance sheet. We continue to be focused on building shareholder value for our shareholders over the long term.”
Earlier this month, Fairfax estimated its aggregate potential net losses related to Katrina would be in the range of $175 million to $220 million before tax and minority interests.
Fairfax said in a press release that intends to use the proceeds of this issue to augment its cash, short-term investments and marketable securities held at the holding company level. Closing of this share issuance is expected to occur on or about October 12, 2005. Fairfax will file a supplement to its current shelf prospectus with applicable Canadian and U.S. securities regulatory authorities providing for the issuance of these additional shares.