Kingsway International Holdings Limited Announces Completion of a Private Placement Offering of Convertible Debentures for proceeds of C$7,500,000



    HONG KONG, Sept. 19 /CNW/ - Kingsway International Holdings Ltd (TSX:
KIH) (the "Company"), a leading Hong Kong based provider of international
financial services, announces the completion of a private placement offering
(the "Offering") of convertible unsecured debentures for gross proceeds of
$7,500,000 (the "Debentures"). The net proceeds from the sale of the
Debentures will be used by the Company to (a) establish a new merchant banking
group focused on the natural resources sector in China with a particular
emphasis on the energy, mining and related infrastructure sectors; and (b)
general working capital.
    The Debentures mature on September 19, 2011 and bear interest at the rate
of 9% per annum payable semi-annually. The Debentures are convertible into
common shares of the Company (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 at a conversion price ("Conversion Price") of
$0.80 per Share. The Company has the right to redeem the Debentures in whole
or in part at any time after the date of issue if, and only if, the 20-day
volume weighted average of the price of the Shares traded on the Toronto Stock
Exchange (the "TSX") exceeds $1.60 per Share. If the daily trading volume of
the Shares in each of the previous 20 consecutive trading days prior to the
redemption date equals or exceeds 10% of the aggregate number of Shares to be
issued upon redemption on a cumulative basis, the Company may satisfy its
obligation to pay the principal amount of the Debentures and any accrued and
unpaid interest in whole or in part by delivering that number of Shares equal
to the amount due and accrued interest thereon at a price of $0.80 per Share
as long as the market price of the Shares at the time of payment is equal to
or less than $1 and if the market price of the Shares exceeds $1 at the time
of payment, the price at which the Shares may be issued for such payment may
be no less than the market price less the maximum discount provided by TSX
regulations for private placements.
    The Company's principal shareholder, Sun Wah Group of Hong Kong,
subscribed for $4,500,000 of the Offering. Sun Wah is controlled by Dr.
Jonathan Koon Shum Choi ("Dr. Choi"). As a result of the Offering, Dr. Choi
has deemed beneficial control of an additional 5,625,000 Shares and has
ownership or control of a total of 42,554,651 Shares. In addition, Ideal
Performance Limited, subscribed for $1,500,000 of the Offering. Ideal
Performance is controlled by Michael Koon Ming Choi ("Mr. Choi"), who is one
of the Company's directors and is related to and is acting jointly with Dr.
Choi. As a result of the Offering, Mr. Choi has deemed beneficial ownership of
an additional 1,875,000 Shares and has ownership or control of a total of
1,981,937 Shares. If only the Debentures held by Dr. Choi are converted, Dr.
Choi will have up to 49.6% of the Shares; if only the Debentures held by Mr.
Choi are converted, Mr. Choi will have up to 2.41% of the Shares; and if only
the Debentures held by Dr. Choi and Mr. Choi are converted, they will have up
to 50.8% of the Shares.
    By virtue of their status as directors of the Company, the subscriptions
for Debentures by Dr. Choi and Mr. Choi constitute a related party transaction
under Multilateral Instrument 61-101 Protection of Minority Security Holders
in Special Transactions ("MI 61-101"). However, pursuant to paragraph 5.5(a)
of MI 61-101, an exemption from the formal valuation and minority approval
requirements for a related party transaction is available to the Company as
the fair market value of the aggregate subscriptions of the joint actors, Dr.
Choi and Michael Choi, does not exceed 25% of the Company's market
capitalization. The Offering and its related party transaction component was
initially disclosed by the Company's material change report filed on SEDAR on
July 18, 2008.

    About Kingsway International Holdings Limited

    The Company is listed on the TSX under the symbol KIH. The Group, which
consists of the Company and its subsidiaries, is a leading middle tier
financial services provider, linking the global investment community with
China's high growth economy. In addition to engaging in proprietary investment
activities, the Group offers a variety of complementary, client focused
services through its corporate finance and capital markets, brokerage and
asset management divisions.
    Founded in 1990, the Group operates from offices in Hong Kong, Beijing,
Shanghai, Shenzhen and Toronto.

    FORWARD-LOOKING STATEMENTS

    This press release contains forward-looking statements that are based on
the beliefs of Management and reflect the Company's current expectations. In
certain cases, forward-looking information can be identified by the use of
words such as "estimate', "project", 'belief", "anticipate", "intend",
"expect", "plan", "predict", "may", "should", "will," or variations of such
words and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be achieved."
Forward-looking information contained in this press release include
information relating to the creation of the Merchant Banking Group, the focus
and operations of the Merchant Banking Group, the use of proceeds from the
Offering and the change in beneficial ownership of the Company upon the
conversion of certain Debentures. Forward-looking information involves known
and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking information. There can be no assurance that forward-looking
information will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements. Material
factors or risks which could cause actual results or events to differ
materially from a conclusion in such forward-looking information include the
risks that the Company may not be able to create the merchant Banking Group,
the focus and operations of the Merchant Banking Group may change, the
proceeds of the Offering may be used for other purposes and changes to the
Company's share capitalization may alter the expected beneficial ownership of
the Company upon the conversion of some or all of the Debentures, and risks
relating to competition, investment market uncertainty, dependence on key
personnel, employee malpractice, regulation, country and political risks,
risks relating to war, terrorist attacks and political tensions, risks
associated with expansion into international markets, inability to implement
adequate system of controls to manage future growth, impact of health hazards,
ownership and operation of real estate properties, and doing business in China
(including foreign exchange risks, political, economic and social risks, and
risks relating to the Chinese legal system). The Company cautions that the
foregoing list of material factors is not exhaustive and is subject to change.
For additional information with respect to certain of these and other factors,
refer to the risk factors section of the Company's management's discussion and
analysis dated May 14, 2008 for the periods ended March 31, 2008 filed with
the Canadian securities regulators, which is available on SEDAR at
www.sedar.com. The forward-looking information contained in this press release
represents the expectations of the Company as of the date of this press
release and, accordingly, is subject to change after such date. Readers should
not place undue importance on forward-looking information and should not rely
upon this information as of any other date. While the Company may elect to, it
does not undertake to update this information at any particular time.





For further information:

For further information: In Toronto, please contact Gary Quedado,
Kingsway Group, (416) 861-3099 Ext. 238, gquedado@kingswaygroup.ca; In Hong
Kong, please contact Douglas Betts, Kingsway Group, (852) 2283-7309,
dbetts@kingswaygroup.ca

Organization Profile

KINGSWAY INTERNATIONAL HOLDINGS LIMITED

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