By Chelsey Dulaney
FXCM Inc. said Wednesday that it has agreed to sell its Japan
business to a brokerage unit of e-commerce giant Rakuten Inc. for
$62 million, as part of its effort to sell noncore assets to repay
its debt.
The deal is expected to close April 1. The company said Rakuten
Securities will continue to use the FXCM trading system for legacy
FXCM Japan clients.
FXCM, a New York-based foreign-exchange broker, said earlier
this month that it was in the process of disposing of noncore
assets after it was left chasing $276 million from retail clients
who were caught on the wrong side of bets on the Swiss franc in
January.
The Swiss franc surged nearly 30% against the euro in the
minutes following the Swiss National Bank's surprise decision to
stop reining in the currency's value. Collateral put down to
guarantee those bets wasn't sufficient to cover the currency move
on that day, which was unprecedented. It has said that it would
forgive the majority of the negative balances.
To continue operations, FXCM secured a $300 million loan from
Jefferies Group LLC parent Leucadia National Corp. FXCM has already
repaid some of the loan.
FXCM also plans to stop trading a number of currencies,
including the Hong Kong dollar and Danish krone, to avoid
volatility caused by possible future intervention by governments in
currency markets, The Wall Street Journal earlier reported.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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