?70 million Capital Investment

RNS Number : 2935Z

FBD Holdings PLC

16 September 2015

 



FBD Holdings plc

16 September 2015

€70 million Capital Investment

FBD Holdings plc ("FBD" or the "Company" or with its subsidiaries the "Group") is pleased to announce that it has entered into an agreement pursuant to which Fairfax Financial Holdings Limited ("Fairfax") will invest €70 million in FBD through a private placement of a convertible bond instrument (the "Convertible Bond").  The transaction will be subject to FBD shareholder approval.

The Convertible Bond will be a 10 year Solvency II compliant instrument and it will carry a coupon of 7.0% per annum which will be payable semi-annually.  The conversion price has been set at €8.50, a 37% premium over the closing share price on 15 September 2015.  Unless previously redeemed, the Convertible Bond will be exercisable from year 3 to year 10 and, in the event that the 30 day volume weighted average share price exceeds the conversion price for a period of 180 days, the Convertible Bond will automatically convert into ordinary shares in FBD at the conversion price.

The issue of the Convertible Bond to Fairfax is subject to the execution of a final, definitive agreement between the parties and shareholder approval.  As an interim stage in this transaction, agreement has also been reached with Fairfax, that FBD Insurance plc will today issue at 12% per annum, €70 million, 10 year, tier 2 instrument to Fairfax (the "Tier 2 Debt Instrument").  The Tier 2 Debt Instrument will be exchanged for the Convertible Bond within 7 days of Group shareholders approving the issue of Convertible Bond.

Commenting, Interim Chief Executive, Fiona Muldoon, said:

"This is a significant vote of confidence in FBD and in our future success.  I am confident that the completion of this transaction helps our business plan with our core farming and small business customers and with our consumer customers also.  It underpins the Board's strong commitment to maintain healthy capital buffers as we prepare for the implementation of Solvency II."

Mr. Michael Berkery, Group Chairman added:

"I welcome Fairfax as a key additional investor in FBD.  I am confident that Fairfax will be a good strategic partner for the Group as we advance our plans to return to profitability.  The Board will strongly recommend this transaction to shareholders for approval given the clear benefits accruing to the Group and our shareholders."

Commenting, Prem Watsa, Chairman and CEO of Fairfax said:

"Fairfax is delighted to become an investor in and partner to FBD.  We have been a long-standing follower of FBD and its deserved reputation as a leader in the farm insurance sector in Ireland.  This investment underlines our belief in the strength of Ireland's on-going economic recovery and in FBD's core franchise in the farming and agri-business sectors."

ENDS

For Reference:

FBD Holdings plc	Telephone
Fiona Muldoon, Interim Chief Executive	[phone]
Peter Jackson, Head of Investor Relations
Conor Gouldson, Company Secretary

About FBD Holdings plc ("FBD")

The FBD Group was established in the 1960s is one of Ireland's largest property and casualty insurers looking after the insurance needs of farmers, private individuals and business owners.

About Fairfax Financial Holdings Limited ("Fairfax")

Fairfax is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. Fairfax's corporate objective is to achieve a high rate of return on invested capital and build long-term shareholder value. Fairfax seeks to differentiate itself by combining disciplined underwriting with the investment of its assets on a total return basis, which Fairfax believes provides above-average returns over the long-term.

Fairfax was founded in 1985 by the present Chairman and Chief Executive Officer, V. Prem Watsa.  The company has been under present management since 1985 and is headquartered in Toronto, Canada. Its common shares are listed on the Toronto Stock Exchange under the symbol FFH and in U.S. dollars under the symbol FFH.U.

Fairfax's insurance and reinsurance companies operate on a decentralized basis, with autonomous management teams applying a focused underwriting strategy to their markets. Fairfax subsidiaries provide a full range of property and casualty products, maintaining a diversified portfolio of risks across all classes of business, geographic regions, and types of insureds.

The following details relate to FBD's ordinary shares of €0.60 each which are publicly traded:

Listing	Irish Stock Exchange	UK Listing Authority
Listing Category	Dual	Premium (Equity)
Trading Venue	Irish Stock Exchange	London Stock Exchange
Market	Main Securities Market	Main Market
ISIN	IE0003290289	IE0003290289
Ticker	EG7.IR	FBH.L

FBD Holdings plc    FBD House, Bluebell, Dublin 12 Registered in Dublin, Ireland Registered Number 135882

 

END

 

 

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