TORONTO, April 29, 2021 (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.)
Helios Fairfax Partners Corporation (TSX: HFPC.U) announces a net loss of $11.1 million in the first quarter of 2021 ($0.10 net loss per diluted share), compared to a net loss of $121.8 million in the first quarter of 2020 ($2.05 net loss per diluted share), principally reflecting net change in unrealized gains of $1.2 million in the first quarter of 2021 compared to net change in unrealized losses of $68.6 million in the first quarter of 2020 and decreased foreign exchange losses of $1.0 million in the first quarter of 2021 compared to $52.5 million in the first quarter of 2020.
Highlights in the first quarter of 2021 included the following:
- Net change in unrealized gains on investments of $1.2 million were principally comprised of increases in the market price of the company’s investments in Other Public African Investments ($4.8 million), the Atlas Mara Facility Guarantee ($2.0 million) and the CIG Loan ($1.2 million), partially offset by decreases in the market price of the company’s indirect equity interest in AGH ($4.7 million), the Atlas Mara Facility ($1.5 million) and Philafrica common shares ($0.6 million).
- The company recorded a loss on uncollectible accounts receivable of $5.7 million comprised of losses recorded on amounts due from Atlas Mara and refundable Harmonized Sales Tax .
- In accordance with the Investment Advisory Agreement, a performance fee of $1.9 million was accrued to the benefit of the Class D unitholder of TopCo LP for the period from January 1, 2021 to March 31, 2021. The performance fee, if any, will only be crystallized on December 31, 2023 at the end of the three year measurement period.
- The company reported net foreign exchange losses ($1.0 million).
- On March 31, 2021, the company completed the previously announced arrangement with Fairfax Financial Holdings Limited (“Fairfax”), pursuant to which Fairfax through its affiliates invested $100.0 million in 3.0% unsecured debentures of HFP (the “HFP 3.0% Debentures”) and 3 million warrants (the “HFP Warrants”). The HFP Warrants are exercisable for one subordinate voting share of HFP, have an exercise price of $4.90 and are exercisable at any time prior to March 31, 2026. The net proceeds from the HFP 3.0% Debentures will be used primarily to invest in African Investments. The HFP 3.0% Debentures mature on March 31, 2024 or, at the option of Fairfax, on either of the first two anniversary dates. At maturity or on redemption by Fairfax, the principal amount to be repaid will be adjusted for the amount, if any, by which the aggregate fair value of the company’s investments in AGH (indirect via Joseph Holdings), Philafrica common shares, the Philafrica Facility, and the PGR2 Loan is lower than $102.6 million. At March 31, 2021 as a result of this transaction, the company recorded a net benefit of $18.1 million in equity.
- On March 31, 2021 the company committed to invest $50.0 million in Helios Investors IV, L.P. (“Helios Fund IV”) and funded its first capital call for $13.1 million. On April 23, 2021 the company funded an additional $9.3 million in Helios Fund IV.
- At March 31, 2021 common shareholders’ equity was $611.8 million, or book value per share of $5.61 with 109,118,253 shares outstanding, compared to $599.7 million, or book value per share of $5.50 with 109,118,253 shares outstanding, at December 31, 2020, an increase of 2.0%.
There were 109.1 million and 59.4 million weighted average shares outstanding during the first quarters of 2021 and 2020 respectively. At March 31, 2021 there were 53,665,388 subordinate voting shares and 55,452,865 multiple voting shares outstanding.
HFP’s detailed first quarter report can be accessed at its website www.heliosfairfax.com.
In presenting the company’s results in this news release, management has included book value per basic share. Book value per basic share is calculated by the company as common shareholders’ equity divided by the number of common shares outstanding.
Helios Fairfax Partners Corporation is an investment holding company whose 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.
|For further information, contact:||Keir Hunt, General Counsel & Corporate Secretary|
This press release may contain forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements may relate to the company’s or an African Investment’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, an African Investment, 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 our opinions and estimates 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: the COVID-19 pandemic; geographic concentration of investments; financial market fluctuations; pace of completing investments; minority investments; reliance on key personnel and risks associated with the Investment Advisory Agreement; operating and financial risks of African investments; valuation methodologies involve subjective judgments; lawsuits; use of leverage; foreign currency fluctuation; investments may be made in foreign private businesses where information is unreliable or unavailable; significant ownership by Fairfax and Principal Holdco may adversely affect the market price of the subordinate voting shares; emerging markets; South African black economic empowerment; economic risk; weather risk; taxation risks; MLI; and trading price of subordinate voting shares relative to book value per share. Additional risks and uncertainties are described in the company’s annual information form dated March 5, 2021 which is available on SEDAR at www.sedar.com and on the company’s website at www.heliosfairfax.com. 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.