Fairfax Africa Holdings Corporation

Third Quarter Financial Results

TORONTO, Oct. 29, 2020 (GLOBE NEWSWIRE) --

NOT FOR DISTRIBUTION TO U.S. 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 a net loss of $49.5 million in the third quarter of 2020 ($0.84 net loss per diluted share), compared to a net loss of $32.3 million in the third quarter of 2019 ($0.54 net loss per diluted share), reflecting increased net unrealized losses on investments, and increased general and administration expenses, partially offset by net foreign exchange gains.

Update on Strategic Transaction with Helios:

• The company has filed a management information circular relating to the proposed strategic transaction with Helios Holdings Limited. The circular will be mailed to shareholders and is also available on SEDAR at www.sedar.com. The special meeting of shareholders of Fairfax Africa to consider the strategic transaction is scheduled for December 4, 2020.
• Helios is an Africa-focused private investment firm led and predominantly staffed by African professionals, manages geographically diversified portfolios of private equity and credit investments in over 30 African countries.

Highlights in the third quarter of 2020 included the following:

• Net loss of $49.5 million included a net change in unrealized losses on investments of $47.4 million, principally from decreases in the market price of the company's investments in the PGR2 Loan ($17.3 million), Atlas Mara common shares ($11.1 million), Atlas Mara Facility ($10.6 million), its indirect equity interest in AGH ($8.9 million), Philafrica common shares ($6.4 million), CIG common shares ($5.7 million), Atlas Mara 7.5% Bonds ($5.1 million), Atlas Mara 11.0% Convertible Bonds ($5.0 million) and GroCapital Holdings common shares ($5.0 million), partially offset by net foreign exchange gains of $8.0 million reflecting a strengthening of the South African rand relative to the U.S. dollar.
• In connection with the Strategic Transaction, Fairfax Africa will sell its 42.3% equity interest in Atlas Mara to Fairfax for an aggregate purchase price of $40 million. In addition Fairfax will guarantee any obligations of Atlas Mara under the Atlas Mara Facility. As a result of these agreements, Fairfax Africa has recorded a net change in unrealized gains on investments of $28.2 million.
• In the third quarter of 2020 the company advanced an additional $0.9 million under the secured lending arrangement with Atlas Mara, which earns interest at a rate of 10% per annum and matures on March 31, 2021.
• At September 30, 2020 common shareholders' equity was $341.5 million, or book value per share of $5.78, compared to $518.8 million, or book value per share of $8.72, at December 31, 2019, a decrease of 33.7% primarily related to the net loss in the first nine months of 2020.

There were 59.0 million and 60.3 million weighted average shares outstanding during the third quarters of 2020 and 2019 respectively. At September 30, 2020 there were 29,032,975 subordinate voting shares and 30,000,000 multiple voting shares outstanding.