TORONTO, Aug. 25 /CNW/ - (TSX:KFS, NYSE: KFS) Kingsway Financial Services
Inc. ("Kingsway") today announced that it has entered into a definitive
agreement to sell York Fire & Casualty Insurance Company ("York") to La
Capitale General Insurance Inc., a member company of the mutual company, La
Capitale Financial Group Inc., owned by members of Quebec's civil service. The
transaction is expected to be completed during 2008 following the receipt of
York writes standard personal lines automobile and property insurance in
Ontario and Alberta. For the first six months of 2008, York had gross premiums
written of approximately C$48 million, or 5% of the premiums of the Kingsway
group of companies, and produced an underwriting loss.
Kingsway anticipates receiving gross proceeds from the transaction of
C$95 million, which is estimated to be approximately 2 times York's
shareholder's equity at the closing of the transaction. At closing Kingsway
expects to record an estimated gain before taxes on the transaction of
approximately C$50 million.
"The sale of York furthers Kingsway's strategy of focusing its resources
on its core lines of business, such as non-standard automobile and trucking.
In doing so we are building a stronger platform for achieving growth and
sustainable profitability in our leading products, where we have true
competitive advantages," said Shaun Jackson, Kingsway's President and CEO. "We
will use the proceeds of this transaction to retire our remaining short-term
debt and to support future growth opportunities in our core business lines. I
would like to thank all of the employees and management of York for their
dedication and service to the Kingsway family over the years and I look
forward to working with them through the transition period."
Scotia Capital Inc. is acting as financial advisor and Cassels Brock &
Blackwell LLP is acting as legal counsel to Kingsway.
About the Company
Kingsway Financial Services Inc. is one of the largest non-standard
automobile insurers and truck insurers in North America based on A.M. Best
data that we have compiled. The Company also provides commercial and personal
property insurance, standard automobile insurance, motorcycle insurance and
other specialty insurance where limited competition and an emphasis on
underwriting profit provide an opportunity for consistent and above-average
returns. Kingsway Financial operates through 11 wholly-owned insurance
subsidiaries in Canada and two insurance agencies in Canada and the United
States. The Company employs approximately 2,900 people in Canada and the
United States and is headquartered in Mississauga, Ontario, Canada. The common
shares of Kingsway Financial Services Inc. are listed on the Toronto Stock
Exchange and the New York Stock Exchange, under the trading symbol "KFS".
For further information:
For further information: Shelly Gobin, Senior Vice President and Chief
Financial Officer, Tel: (905) 677-8889, Fax: (905) 677-5008, Web Site: