Fairfax India new issue

[Xerxes]

At $10.95, trade with a huge discount to BV.
But I am guessing things will get worse before they get better.

[Viking]

I agree. Hard to pull the trigger on airlines right now. An airport (BIAL)? Need more information.

[hobbit]

So BIAL IPO at 3bn . I wonder if coronavirus will have an impact on the timing or valuation. If it goes through as planned at 3Bn , that would be a significant win for the shareholders.

[petec]

So BIAL IPO at 3bn . I wonder if coronavirus will have an impact on the timing or valuation. If it goes through as planned at 3Bn , that would be a significant win for the shareholders.

Link?

[hobbit]

So BIAL IPO at 3bn . I wonder if coronavirus will have an impact on the timing or valuation. If it goes through as planned at 3Bn , that would be a significant win for the shareholders.

Link?

annual letter just published
"
Fairfax India intends to complete an IPO of AIIHL, targeted to value 100% of BIAL at $3.0 billion (a targeted valuation of $1.3 billion for 100% of AIIHL). A ‘‘ratchet’’ mechanism has been agreed with the investor whereby if the IPO is completed at a valuation of AIIHL below $1.3 billion, the investor will receive incremental shares of AIIHL to compensate for the difference between that actual valuation and $1.3 billion.
"
https://s1.q4cdn.com/293822657/files/doc_financials/annual_reports/2019/Website-Fairfax-India-2019-Shareholders-Letter.pdf

do not know what to make of the ratchet clause though, I have seen it in some VC deals before.

[petec]

So BIAL IPO at 3bn . I wonder if coronavirus will have an impact on the timing or valuation. If it goes through as planned at 3Bn , that would be a significant win for the shareholders.

Link?

annual letter just published
"
Fairfax India intends to complete an IPO of AIIHL, targeted to value 100% of BIAL at $3.0 billion (a targeted valuation of $1.3 billion for 100% of AIIHL). A ‘‘ratchet’’ mechanism has been agreed with the investor whereby if the IPO is completed at a valuation of AIIHL below $1.3 billion, the investor will receive incremental shares of AIIHL to compensate for the difference between that actual valuation and $1.3 billion.
"
https://s1.q4cdn.com/293822657/files/doc_financials/annual_reports/2019/Website-Fairfax-India-2019-Shareholders-Letter.pdf

do not know what to make of the ratchet clause though, I have seen it in some VC deals before.

Thanks!

[bizaro86]

That takes a lot of probitive value away from the mark on the airport. They basically guaranteed the buyer a 10%+ capital gain on the investment. On those terms, it seems likely they could have sold a small minority stake at basically any price. I wouldn't care, except they're using that mark for the performance fee.

[Jurgis]

That takes a lot of probitive value away from the mark on the airport. They basically guaranteed the buyer a 10%+ capital gain on the investment. On those terms, it seems likely they could have sold a small minority stake at basically any price. I wouldn't care, except they're using that mark for the performance fee.

Yes. 

[bizaro86]

The more I think about it, the less ethical it seems. Shareholders are the ones paying for this guarantee, while management (via performance fee) are the ones benefiting from it.

[TwoCitiesCapital]

The more I think about it, the less ethical it seems. Shareholders are the ones paying for this guarantee, while management (via performance fee) are the ones benefiting from it.

Generally agree with this. Isn't egregious, but is distatseful