FXCM Aims for FastMatch, Lucid Stake Sale to Repay LoanJohn Detrixhe and Sam Mamudi
FXCM Inc., the currency brokerage nearly ruined in January by the Swiss franc’s surge, is seeking to sell its stakes in three trading businesses as it grapples with repaying an emergency loan.
The company started the process of selling the positions in FastMatch, Lucid and V3 Markets, FXCM Chief Executive Officer Drew Niv said during a conference call with analysts on Thursday. Niv said it has received “many unsolicited indications of serious interest” for Lucid, a market-making firm, and FastMatch, a currency trading platform. V3 is a high-frequency trader.
FXCM, whose foreign-exchange brokerage serves retail clients, lost more than $200 million after the Swiss central bank’s Jan. 15 decision to let the franc trade freely against the euro. A $300 million bailout from Leucadia National Corp. saved FXCM from violating capital requirements. The bailout lets Leucadia force a sale of the company and keep most of the proceeds for itself.
Leucadia loaned $300 million to New York-based FXCM, and can charge as much as 20.5 percent interest. The rate on the loan starts at 10 percent and rises 1.5 percent each quarter.
FXCM aims to “make significant near-term reductions in our loan obligation to Leucadia through the sale of non-core assets and cash generated from our profitable operations to repay the full loan by the end of this year,” Niv said during the call.
FastMatch, which runs a venue for traders to buy and sell currencies, is probably the most prominent of the three businesses. KCG Holdings Inc. just sold HotSpot, which is one of FastMatch’s competitors, to Bats Global Markets Inc. for $365 million.
“While smaller than HotSpot, FastMatch has grown much more rapidly,” Niv said.
Following the disclosure, FXCM’s shares surged 20 percent to $2.58 as of 4 p.m. New York time Friday. The stock was trading above $15 before the Swiss central bank’s decision roiled currency markets in January.