Acquisition of $4,500,000 of convertible unsecured debentures of Kingsway International Holdings Limited



    TORONTO, Aug. 26 /CNW/ - Dr. Jonathan Koon Shum Choi ("Dr. Choi") of
Hong Kong, China announces that he is updating the disclosure provided in his
previous press release dated July 14, 2008 regarding the acquisition of
$4,500,000 of convertible debentures of Kingsway International Holdings
Limited (the "Corporation"). Dr. Choi announces that Sun Wah Capital Limited
(a corporation controlled by Dr. Choi) has entered into a subscription
agreement to purchase convertible unsecured debentures of the Corporation for
a principal amount of $4,500,000 (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 Sun Wah
Capital Limited 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 Sun Wah Capital Limited will meet the
requirements of the exemption set out in BC Instrument 72-503 including the
fact that the distribution to Sun Wah Capital Limited is not made to a
purchaser resident in British Columbia.
    Currently and prior to the proposed acquisition of the Debentures,
Dr. Choi beneficially owns or controls, directly and indirectly, 36,929,651
Shares, representing approximately 46% of the outstanding Shares. Of the
36,929,651 Shares, 12,750,000 Shares are held by Sun Wah Capital Limited and
14,078,055 Shares are held by Scarlet Red Limited. Dr. Choi controls both Sun
Wah Capital Limited and Scarlet Red Limited. The remaining 10,101,596 Shares
are owned directly by Dr. Choi.
    Immediately following the acquisition of the Debentures and assuming the
full conversion of only the Debentures expected to be controlled by Dr. Choi,
Dr. Choi would control an additional 5,625,000 Shares, representing
approximately an additional 3.5% of the then outstanding Shares, and in total,
Dr. Choi would beneficially own or control, directly and indirectly,
42,554,651 Shares, representing approximately 49.6% of the then outstanding
Shares of approximately 85,825,005 Shares.
    Michael Koon Ming Choi ("Mr. Choi"), who is related to Dr. Choi and is a
director of the Corporation, has indicated that he intends to subscribe for
Debentures with a principal amount of $1,500,000. Mr. Choi currently owns
106,937 Shares and immediately following the acquisition of his Debentures,
assuming full conversion of only the Debentures held by him, Mr. Choi will
beneficially own 1,981,937 Shares, representing approximately 2.4% 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
Dr. Choi together with Mr. 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.
    Dr. Choi is beneficially acquiring the Debentures for investment
purposes. In pursuing such purposes, Dr. Choi takes a long-term view of the
investment. Dr. Choi reserves the right to formulate other plans or make other
proposals, and take such actions with respect to his investment in the
Corporation. Dr. 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. A copy of the
Early Warning Report may also be obtained by contacting Gary Quedado at (416)
861-3099 ext 238.

    
    "Dr. Jonathan Koon Shum Choi"
    --------------------------------
    DR. JONATHAN KOON SHUM 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

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KINGSWAY INTERNATIONAL HOLDINGS LIMITED

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