TORONTO, Aug. 26 /CNW/ - Michael Koon Ming Choi ("Mr. Choi") of Hong
Kong, China announces that Ideal Performance Limited, a corporation controlled
by Mr. Choi, has entered into a subscription agreement to purchase convertible
unsecured debentures of Kingsway International Holdings Limited (the
"Corporation") for a principal amount of $1,500,000 (the "Debentures"). The
completion of the subscription is expected on or about September 8, 2008.
The Debentures will be convertible into common shares of the Corporation
(the "Shares") at any time prior to the close of business on the earlier of
maturity and the business day immediately preceding the date fixed for
redemption of the Debentures at a conversion price of $0.80 per Share. The
Debentures will mature three years from their date of issue and bear interest
at the rate of 9% per annum payable semi-annually. The Corporation will also
have the right to redeem the Debentures in whole or in part at any time after
the date of issue if the 20-day volume weighted average price of the Shares
traded on the Toronto Stock Exchange exceeds $1.60 per share. The Corporation
may satisfy its obligation to pay the principal amount of the Debentures plus
any accrued and unpaid interest in whole or in part by delivering that number
of Shares equal to the amount due plus accrued interest thereon divided by
$0.80; provided that the trading in the Shares equals or exceeds no less than
10% of the principal amount of the Debentures to be redeemed in each of the
previous 20 trading days. The distribution of the Debentures to Mr. Choi is
exempt from prospectus and registration requirements pursuant to exemptions
including the exemption set out in BC Instrument 72-503 - Distribution of
Securities Outside British Columbia. The proposed distribution of the
Debentures to Mr. Choi will meet the requirements of the exemption set out in
BC Instrument 72-503 including the fact that the distribution to Mr. Choi is
not made to a purchaser resident in British Columbia.
Currently and prior to the proposed acquisition of the Debentures, Mr.
Choi directly owns 106,937 Shares, representing approximately 0.13% of the
Immediately following the acquisition of the Debentures and assuming the
full conversion of only the Debentures expected to be controlled by Mr. Choi,
Mr. Choi would control an additional 1,875,000 Shares, representing
approximately an additional 2.3% of the then outstanding Shares.
Jonathan Koon Shum Choi ("Dr. Choi"), who is related to Mr. Choi and is a
director of the Corporation, has indicated that he or his nominee intends to
subscribe for Debentures with a principal amount of $4,500,000. Dr. Choi
currently beneficially owns or controls 36,929,651 Shares and immediately
following the acquisition his Debentures, assuming full conversion of only the
Debentures held by him, Dr. Choi will beneficially own 42,554,651 Shares,
representing approximately 49.6% of the then outstanding Shares.
Immediately following the acquisition of the Debentures and assuming full
conversion of only the Debentures expected to be owned or controlled by Mr.
Choi together with Dr. Choi, they are expected to beneficially own or control,
directly and indirectly 44,536,588 Shares, representing approximately 50.8% of
the then outstanding Shares.
Mr. Choi is beneficially acquiring the Debentures for investment
purposes. In pursuing such purposes, Mr. Choi takes a long-term view of the
investment. Mr. Choi reserves the right to formulate other plans or make other
proposals, and take such actions with respect to his investment in the
Corporation. Mr. Choi may at any time reconsider and change his plans or
proposals relating to the foregoing.
This press release is issued pursuant to section 111 of the Securities
Act (British Columbia), section 176 of the Securities Act (Alberta) and
section 101 of the Securities Act (Ontario), which also require a report to be
filed with regulatory authorities in each of the jurisdictions containing
additional information with respect to the foregoing matters (the "Early
Warning Report"). A copy of the Early Warning Report will appear with the
Corporation's documents on the SEDAR website, at www.sedar.com.
"Michael Koon Ming Choi"
MICHAEL KOON MING CHOI
For further information:
For further information: A copy of the Early Warning Report may also be
obtained by contacting Gary Quedado at (416) 861-3099 ext 238