FXCM finalizes FastMatch deal, to repay part of debt to Leucadia

FXCM finalizes FastMatch deal, to repay part of debt to Leucadia

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FXCM Group, the remaining UK and Australia-regulated units of Global Brokerage announced it has finalized the sale of its FastMatch share to the pan-European exchange Euronext. In a separate announcement, Euronext said that all regulatory and anti-trust requirements have been met.

On closing the deal FXCM got $46.7 million in cash, with $8.7 million held in escrow subject to certain potential future adjustments. FXCM also has has a share of a $10 million earnout if certain performance targets of FastMatch are met.

The proceeds from the sale will be used by by FXCM to repay part of its outstanding loan to Leucadia, with $66.8 million outstanding. “With the close of this deal we have made a significant step towards reducing the Leucadia debt,” said Brendan Callan, CEO of FXCM Group.

In the end of July Leucadia’s H1 2017 revealed that FXCM still owes it $122.1 million of the principal balance outstanding, as of the end of June.

Leucadia has lent FXCM $300 million in January 2015. The sum was needed by FXCM to meet its regulatory-capital requirements and continue normal operations after the unprecedented  loss of $225 million due to Swiss National Bank decision to abandon EUR/CHF minimum exchange rate.

The loan had an initial interest rate of 10% per annum, increasing by 1.5% per annum each quarter, not to exceed 20.5% per annum. Additionally, Leucadia got a 49.9% stake in FXCM Group, with the rest in in the hands of Global Brokerage Inc.

In 2016 the conditions of the loan were amended and Leucadia extended the agreement by one year, to January 2018.

FXCM Group includes the FCA and ASIC-regulated units of Global Brokerage, after the closure of FXCM US in February. The brokerage offers trading in forex and CFDs both to retail and institutional clients, on several types of accounts. The trading platforms for retail clients are the popular MetaTrader 4 and FXCM’s proprietary TradingStation.

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