Insurance holding company Fairfax Financial Holdings Ltd. is raising US$300 millionby issuing about 1.84 million shares to several institutional investors.

The Toronto-based financial services firm said late Tuesday the subordinate voting shares will be sold at Tuesday’s market closing price of $162.75 apiece.

Fairfax said it intends to use the proceeds to augment its cash, short-term investments and marketable securities.

“Fairfax is raising significant equity at this time with a view to bulletproofing its balance sheet and achieving the financial flexibility that has been its hallmark in the past,” CEO Prem Watsa said in a news release.

“With the huge projected hurricane Katrina losses for the industry, we believe the industry dynamics may well be good again. We believe raising this significant equity should continue to improve our ratings and delever our balance sheet.”

In early September, Fairfax said its initial estimate of losses relating to hurricane Katrina in the Gulf Coast was in the range of US$175 million to US$220 million.