FXCM to Sell Japanese Business for $62 Million

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 [e-mail]

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