Mr. Michael Wilkerson reports

PROPOSED STRATEGIC TRANSACTION BETWEEN HELIOS HOLDINGS LIMITED AND FAIRFAX AFRICA HOLDINGS CORPORATION

Fairfax Africa Holdings Corp. has entered into a definitive agreement with Helios Holdings Ltd., the leading Africa-focused private investment firm, for the combination of their complementary businesses on one unified platform. The Helios Holdings Group will contribute certain economic streams (from the management and performance fees arising from current and future Helios funds) to Fairfax Africa in exchange for a 45.9-per-cent equity and voting interest in the pro forma share capital of Fairfax Africa. Fairfax Financial Holdings Ltd. will retain voting control of the combined entity.

• Helios Fairfax Partners Corp. to become the leading pan-Africa-focused listed alternative asset manager with unique capabilities to invest across the continent;
• Creates a diversified investment platform combining best-in-class third party investment management capabilities with the strength of long-term shareholders in a permanent capital vehicle;
• Provides an enlarged capital base, increasing capacity to invest as well as to launch additional and differentiated Africa-focused asset management strategies and initiatives;
• Reinforces the parties' shared long-term commitment to be a consistent and trusted provider of capital to growing African businesses across market cycles;
• Tope Lawani and Babatunde Soyoye, the co-founders and managing partners of Helios Investment Partners LLP, will become joint chief executive officers of the combined holding company, enabling the company to build on the record it has established over the last 15 years.

On closing of the transaction, Fairfax Africa will be renamed Helios Fairfax Partners Corp. (HFP) and continue to be listed on the Toronto Stock Exchange.

Tope Lawani and Babatunde Soyoye, the co-founders and managing partners of Helios Investment Partners LLP, the investment adviser to the Helios funds, will be appointed as co-chief executive officers of HFP. Since 2004 they have jointly built the leading pan-Africa-focused private equity business with four successful funds. The current CEO of Fairfax Africa, Michael Wilkerson, will become the executive vice-chairman of HFP.

Upon closing, Helios will be appointed sole investment adviser to HFP. As a result of the transaction, HFP shareholders will benefit from a broader team of experienced investment professionals fully focused on Africa, with deep local knowledge, differentiated capabilities, and a successful record across the continent in identifying and securing high-quality, largely proprietary, investment opportunities.

In addition to being appointed as investment adviser to HFP, Helios will pursue the growth of its third party investment advisory business in Africa-focused alternative assets, continuing to advise on its existing private equity and credit funds, with combined assets under management of over $3.6-billion (U.S.), and raising and deploying future funds in similar strategies and new initiatives. Current investors in Helios's latest fund, Helios IV, include CDC Group (the United Kingdom's development finance institution) and the International Finance Corp. (a member of the World Bank Group). The transaction will strengthen Helios's third party fund advisory capabilities by enabling greater investment flexibility and capacity, enhancing Helios's position as a constructive and creative partner of choice for Africa.

The transaction creates a leading Africa-focused alternative investment manager with the strength and stability of an investment holding company and the enhanced cash flow and liquidity profiles of an alternative asset manager. HFP will continue to be publicly listed and will represent an attractive investment vehicle offering exposure to high-quality investments in African markets. HFP's business will benefit from diversified revenue streams from both recurring and predictable asset management fees and carried interest income from long-dated third party funds under management as well as capital gains from the appreciation of its proprietary capital. HFP's permanent capital base will support the launch of new third party fund strategies and initiatives, leveraging Helios's record and expertise.

Additional transaction details

Fee streams contributed by Helios Holdings Group consist of:

• 100 per cent of excess fees, defined as all management and other fees paid to Helios or any of its affiliates in connection with the management of any existing or future fund (including the management of HFP and its subsidiaries) less expenses, administrative fees or other fees necessary for the operation of managing those funds;
• 25 per cent of all carried interest amounts generated by any existing private equity fund managed by Helios or any of its affiliates, excluding Helios IV;
• 50 per cent of all carried interest amounts generated by any future fund managed by Helios or any of its affiliates, including Helios IV.

The current carried interest incentives for Helios's investment professionals remain in place and the all-share transaction ensures strong alignment between the investment team, limited partners of Helios's funds and the shareholders of HFP in delivering strong and sustainable performance across all parts of the combined business.

Tope Lawani, co-founder and managing partner of Helios Investment Partners LLP, said:

"We are proud to be partnering with Fairfax Financial and Prem Watsa on this next step of Helios's development. The combination leverages our mutual strengths and enables us to provide public market investors with unique access to a differentiated set of investment opportunities on the African continent, as we have been doing for our partners in our private funds. This will strengthen our ability to deliver on our mission to generate globally competitive investment returns and create positive socio-economic development outcomes for Africa by building profitable, value-creating and socially responsible businesses."

Prem Watsa, chairman and CEO of Fairfax Financial Holdings, added:

"We are excited to partner with Tope and Babatunde in establishing Helios Fairfax Partners. They have an outstanding track record in investing in Africa over the past 15 years. Our cultures are very similar and Tope and Babatunde, with our support, aim to establish the pre-eminent investment vehicle for Africa in the years to come. We believe this partnership will be good for Africa, the shareholders of Fairfax Africa and Helios, and the employees of both organizations."

Michael Wilkerson, chief executive officer of Fairfax Africa, said:

"This combination creates the pre-eminent pan-African investment platform, bringing together the complementary strengths of our respective expertise, cultures and people, in an attractive permanent capital vehicle. We are very pleased to partner with Tope, Babatunde and the entire Helios team, and look forward to working together to build sustainable value for our shareholders over time."

Transaction process

Fairfax Africa will call a special shareholder meeting at which shareholders of Fairfax Africa will be asked to approve, among other things, an amendment to Fairfax Africa's articles and bylaws in order to give effect to the transaction.

The board of directors of Fairfax Africa has formed a special committee comprising directors who are independent of Fairfax Africa management and of Fairfax Financial and its affiliates. The special committee, after receiving independent legal and financial advice (including a fairness opinion from Alvarium MB (U.K.) Ltd. described below), unanimously recommended that the board approve the transaction and recommend to shareholders (other than Fairfax Financial and its affiliates) that they vote in favour of the transaction at the meeting. Based on the recommendation of the special committee, the board (with interested directors abstaining) has determined that the transaction is in the best interests of Fairfax Africa and is unanimously recommending that shareholders (other than Fairfax Financial and its affiliates) vote in favour of the transaction at the meeting.

The special committee has retained Alvarium as an independent financial adviser. Alvarium provided its verbal opinion to the effect that, as of July 10, 2020, subject to the assumptions, limitations and qualifications to be set out in Alvarium's written fairness opinion, the financial terms of the transaction are fair, from a financial point of view, to the corporation and its shareholders (excluding any related party shareholders who may be entitled to receive a collateral benefit in connection with the transaction). The written fairness opinion will be included in the management proxy circular to be filed and mailed to shareholders in connection with the approval of the transaction at the meeting.

HFP, Fairfax Financial, Mr. Lawani and Babatunde Soyoye will enter into a new securityholders' agreement pursuant to which, among other things, the board of directors of HFP postclosing of the transaction will consist of nine members in total, of which Fairfax Financial will nominate three members, Helios Holdings Group will nominate two members, and four members will be independent and jointly nominated by Fairfax Financial and Helios Holdings Group.

Completion of the transaction, which is expected to occur in the third quarter of this year, is subject to customary conditions, including receipt of applicable regulatory approvals, the approval of the Toronto Stock Exchange and approval by shareholders at the meeting (including a majority of the votes cast by holders of Fairfax Africa's subordinate voting shares (excluding any subordinate voting shares owned by Fairfax Financial and its affiliates)).

Significant shareholders of Fairfax Africa, being Fairfax Financial and OMERS Administration Corp., have entered into voting support agreements with Fairfax Africa and the Helios Holdings Group pursuant to which the supporting shareholders have agreed, subject to the terms thereof, to vote their shares in the capital of Fairfax Africa in favour of the transaction. The supporting shareholders hold, collectively, 100 per cent of the total votes attached to the multiple voting shares of Fairfax Africa, approximately 65.7 per cent of the total votes attached to the subordinate voting shares of Fairfax Africa and approximately 54.7 per cent of the total votes attached to the subordinate voting shares of Fairfax Africa (excluding those held by Fairfax and its affiliates).

Pursuant to the purchase agreement, the transaction is subject to additional closing conditions, including, among others, the acquisition by Fairfax Financial of Fairfax Africa's equity stake in Atlas Mara Ltd. for an aggregate purchase price of $40-million (U.S.). Fairfax Financial will also be guaranteeing the repayment of amounts drawn under a $40-million (U.S.) secured credit facility made available by Fairfax Africa to Atlas Mara.

Advisers

McCarthy Tetrault LLP is legal adviser to Fairfax Africa and Fairfax Financial.

Alvarium is financial adviser and Goodmans LLP is legal adviser to the special committee.

Lazard is financial adviser and Kirkland & Ellis LLP and Stikeman Elliott LLP are legal advisers to Helios Holdings Group.

About Helios Investment Partners LLP

Established in 2004, Helios Investment Partners is the largest Africa-focused private investment firm, with a record that spans creating start-ups to providing expanding companies with growth capital and expertise. Led and predominantly staffed by African professionals with the language skills and cultural affinity to engage with local entrepreneurs, managers and intermediaries on the continent, Helios leverages its local and global networks to create attractive proprietary investment opportunities, with an emphasis on building market leaders in core economic sectors and driving performance through a highly engaged approach to portfolio operations. The firm's unique combination of a deep knowledge of the African operating environment, a singular commitment to the region and a proven capability to manage complexity, is reflected in the firm's diverse portfolio of growing, market-leading businesses and its position as a partner of choice in Africa. Helios is the largest emerging markets-focused private equity firm, and second mainstream private equity firm globally, to receive B Corp certification.

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