FXCM targets repayment of Leucadia loan by end of 2015

US Forex broker FXCM Inc (NYSE:FXCM) has earlier today held a conference call regarding its results for the first quarter of 2015. LeapRate has already provided you with a glimpse into the financial metrics and with a more detailed analysis of some of the key components that have led to the hefty loss the company has incurred in the first three months of 2015.

In the face of the gloomy financial metrics, FXCM’s management today was upbeat about the performance of the company, with some rather optimistic forecasts being announced regarding EBITDA, revenue margins and loan repayment. This was particularly interesting to hear, bearing in mind the heavy interest expenses ($30 million) posted in the first quarter of 2015, along with the Letter Agreement expense of $292.4 million. Then, of course, there are the bad debt expenses of $257 million…

During the conference call, both FXCM’s chief executive Drew Niv and chief financial officer Robert Lande stressed that the Letter Agreement expense, along with tax expenditure and interest rates, represent non-cash items, meaning this should not affect regulatory capital, cash balances or customers. Particularly for the Letter Agreement, Lande noted that this reflects the value of potential payments to Leucadia National Corp. (NYSE:LUK).

So, the bill is still heavy, but the prognosis was optimistic. Niv said FXCM’s target would be that the debt is gone by this year’s end.

To back this rosy forecast, Niv said the proceeds from the sales of non-core assets in both the institutional and retail segment were shaping better than expected. All of the sales should be completed in less than a year.

After FXCM Japan, FXCM Hong Kong’s operations are set to go. Niv noted, however, that FXCM will not stop servicing Asia, especially China. All core retail FX operations will remain within FXCM, including the US, UK and Australian business, which together generate the lion’s share of EBITDA for the broker.

As you can see from the screenshot below, the institutional operations of the broker will also be affected by the sales process.


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