FXCM has successfully completed the sale of its DailyFX business to IG Group for $40 million. IG paid $36 million in cash, with an additional $4 million to be paid upon the completion of “certain migration requirements.”
The proceeds of the sale will be used to pay off some of the debt owed by FXCM to Leucadia. Currently FXCM has paid $154 million of its debt to Leucadia, with another $156 million outstanding.
“With the close of this deal we have made another positive step towards completing our goal of eliminating the Leucadia debt through the sale of non-core assets and cash generated through operations,” said Drew Niv, the company’s CEO.
Leucadia National Corp bailed out the listed currency broker to the tune of $300 million, after FXCM almost failed in January 2015. Jefferies Grtoup LLC, Leucadia’s investment bank, charged FXCM a $21 million fee for putting the deal together.
In September, FXCM won an extra year to pay back the rescue package. However, this also left Leucadia owning 49% of the company. After January 2018, each firm will have the right to unwind the partnership. The loan originally came attached with requirements that gaves Leucadia the right to force a sale of FXCM and keep most of the money for itself.
Both companies have agreed that it would be mutually beneficial to provide FXCM with more time to sell assets, like DailyFX for example. Based in New York, DailyFX was originally founded in 1999. It is now defined as a “news and education site of IG Group.” It focuses on providing market news and analysis specifically for the currency trading community.
FXCM was originally caught out after the Swiss National Bank, Switzerland’s central bank, decided to let the CHF (Swiss franc) float freely against the EUR. The loan from Leucadia stopped the broker from violating its capital requirements.