Prem Watsa Increases Stake In EXCO Resources


Prem Watsa, chairman and CEO of Fairfax Financial Holdings Ltd (TSE:FFH) increased his stockholding in EXCO Resources Inc (NYSE:XCO) based on its latest 13G filing with the Securities and Exchange Commission (SEC) today.

Watsa, who is considered by some people in the investment industry as the Warren Buffett of Canada, purchased an additional 6,726,712 share in EXCO Resources Inc (NYSE:XCO) bringing his total stake in the oil and natural gas company to 17,538,912 shares.

EXCO Resources Inc (NYSE:XCO) initiated a $273 million rights offering wherein 54.5 million total shares of its common stock were offered to shareholders. Watsa was among the shareholders who exercised their commitment agreement with the company.

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EXCO Resources rights offering

Under the rights offering, shareholders were given the privilege to buy 0.25% of a share of the common stock of EXCO Resources Inc (NYSE:XCO) for a price equal to $5.00 per share. Aside from Watsa, Howard Marks of Oaktree Capital Management and Wilbur Ross of WL Ross & Co. LLC also boosted their stake in the company through the rights offering.

Marks currently owns a total of 45,251,182 shares in Exco Resources Inc (NYSE:XCO), an increase of 23% from 36,778,946 shares in the third quarter of 2013. On the other hand, Ross increased its position in the oil and natural gas company to 51,107,800 shares from 31,507,827 shares in the third quarter.

EXCO Resources net proceeds

EXCO Resources Inc (NYSE:XCO) announced that they have already closed their $273 million rights offering and 28.2 million shares were issued out of the 54.5 million shares offered to shareholders. It has 272,820,969 outstanding shares of its common stock after the rights offering.

The oil and natural gas company said it received $272 million net proceeds from the rights offering after deducting estimated expenses. The company used $28.9 million from the proceeds in repaying all of its debt related to the asset sale requirement and $242.2 million was used to repay its revolving commitment under its credit agreement.

Watsa bullish on businesses in India

Meanwhile, Watsa indicated his intention to make additional investments in India by using Thomas Cook as an investment vehicle. “If you take out an annual report of an Indian business, you can understand it. There are tons of companies that have done very well. So, not a lot different from the story in North America. India has good companies, English as a link language, democracy, rule of law and very positive demographic trends. That’s the big advantage of India,” said Watsa as quoted by the Economic Times.

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