Estimates at $947 mln

Leucadia Says It Could Triple $300 Million Investment in FXCM

The lender of last resort for FXCM in January has contracted an independent third-party valuation company to estimate its investment

According to a regulatory filing made by Leucadia National, the $300 million bailout package devised for FXCM is so far paying off handsomely for the investor. Back in January, FXCM received a rescue loan from the U.S. holding company.

Sticking true to its moniker, which is “baby Berkshire Hathaway”, Leucadia National has been very diversified in its investment strategy. The conglomerate operates in mining, healthcare, banking, telecoms and other sectors.

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The rescue loan and associated rights are currently valued at $947 million

According to the estimate published by the company in its regulatory filing, the rescue loan and associated rights are currently valued at $947 million.

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At the time, the investment banking arm of Leucadia National, Jefferies Group LLC, pocketed a hefty fee for arranging the deal between its parent company and the foreign exchange broker. The amount that FXCM paid to the intermediary for devising the bailout totaled $21 million.

In the aftermath of the Swiss National Bank removing the floor under the EUR/CHF exchange rate, FXCM announced a hefty loss surpassing $225 million on January 16th. After the bailout deal with Leucadia was announced, shares of the company traded as low as $1.28 per share. A week before the ‘black swan’ event, the company’s stock peaked out at $17.44. per share.

Handler and President at Leucadia National, Brian Friedman, shared in an official statement, “Our investment stabilized FXCM’s financial position, and has allowed management to focus on repaying our loan and reinvigorating growth in FXCM’s business.”

“We are impressed with the quality and strength of FXCM’s management, and are optimistic regarding FXCM’s long-term prospects,” he added.

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