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Member, Beacon International Group, Ltd.
TORONTOFairfax Financial Holdings Ltd. said it is raising $300 million in a share offering.
Toronto-based Fairfax said it has agreed to offer approximately 1.84 million shares to several institutional investors at $162.75 per share. The share issue is expected to close in mid-October.
The insurer said in a statement that the proceeds will be used to "augment its cash, short-term investments and marketable securities held at the holding company level."
"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," Prem Watsa, Fairfax's chief executive officer, said in the a statement. "With the huge projected hurricane Katrina losses for the industry, we believe the industry dynamics may well be good again," but the issue will help the insurer improve ratings as well as earnings, he said.
Earlier this month, Fairfax estimated its pretax losses stemming from Hurricane Katrina in the range of $175 million to $220 million.