Mr. Prem Watsa reports

FAIRFAX AFRICA HOLDINGS CORPORATION: SECOND QUARTER FINANCIAL RESULTS

Fairfax Africa Holdings Corp. had a net loss of $4.2-million in the second quarter of 2020 (seven-cent net loss per diluted share), compared with a net loss of $16.2-million in the second quarter of 2019 (27-cent net loss per diluted share), reflecting decreased net unrealized losses on investments in the quarter.

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 (IFRS), except as otherwise noted, and are unaudited.

Strategic transaction with Helios Holdings Ltd.

• On July 10, 2020, the company announced that it had entered into a definitive agreement with Helios Holdings Group pursuant to which Helios Holdings Group will contribute certain economic fee streams to Fairfax Africa in exchange for a 45.9-per-cent equity and voting interest in the pro forma share capital of Fairfax Africa. Following completion of the transaction, Fairfax Africa will be renamed Helios Fairfax Partners Corp. (HFP) and its subordinate voting shares will continue to be listed on the Toronto Stock Exchange. In connection with the transaction, Fairfax Africa will sell its 42.4-per-cent equity interest in Atlas Mara to Fairfax for a total purchase price of $40-million. In addition, Fairfax will guarantee any obligations of Atlas Mara under the Atlas Mara facility. The transaction is expected to close in the third quarter of 2020, subject to customary conditions including receipt of applicable regulatory and shareholder approvals.
• Upon closing, 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, Helios will be appointed sole investment adviser to HFP, and Michael Wilkerson will be appointed executive vice-chairman of HFP.

"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," said Prem Watsa, chairman and CEO of Fairfax Financial Holdings Ltd.

Highlights in the second quarter of 2020 included the following:

• Net loss of $4.2-million included a net change in unrealized losses on investments of $10.9-million, principally from decreases in the market price of the company's investment in Atlas Mara common shares ($7.3-million), GroCapital Holdings common shares ($6.8-million), indirect equity interest in AGH ($6.0-million) and CIG common shares ($3.2-million), partially offset by unrealized gains on the Nova Pioneer bonds ($4.2-million), Philafrica common shares ($3.3-million) and CIG loan ($2.2-million), as well as net foreign exchange gains of $5.8-million reflecting a strengthening of the South African rand relative to the U.S. dollar.
• In the second quarter of 2020, the company advanced $39.1-million under the secured lending arrangement with Atlas Mara, which earns interest at a rate of 10 per cent per year and matures on March 31, 2021.
• On May 27, 2020, the company entered into a secured lending arrangement with Philafrica pursuant to which Fairfax Africa agreed to provide up to $8.6-million (150.0 million South African rand) of financing during a commitment period which ended on June 17, 2020. The facility will earn interest at a rate of South African prime plus 2.0 per cent per year and will mature on March 31, 2021. During the second quarter of 2020, the company advanced $5.7-million (100.0 million South African rand) under the facility.
• On June 30, 2020, the company invested an additional $1.8-million (32.0 million South African rand) in GroCapital Holdings. Upon completion of this transaction, the company had invested total cash consideration of $19.4-million (285.7 million South African rand).
• During this period of uncertainty, Fairfax Africa remains in strong financial health, with sufficient undeployed cash and marketable securities of approximately $80-million.
• At June 30, 2020, common shareholders' equity was $391.0-million, or book value per share of $6.62, compared with $518.8-million, or book value per share of $8.72, at Dec. 31, 2019, a decrease of 24.1 per cent, primarily related to the net loss in the first six months of 2020.

There were 59.0 million and 61.0 million weighted average shares outstanding during the second quarters of 2020 and 2019, respectively. At June 30, 2020, there were 29,032,975 subordinate voting shares and 30 million multiple voting shares outstanding.

Fairfax Africa's detailed second quarter report can be accessed at its website.

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.

About Fairfax Africa Holdings Corp.

Fairfax Africa 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.

We seek Safe Harbor.