HONG KONG, Jan. 5 /CNW/ - Michael Koon Ming Choi ("Mr. Choi") of Hong
Kong, China announces that the terms of the convertible unsecured
debentures of Kingsway International Holdings Limited (the
"Corporation") for a principal amount of $1,500,000 (the "Debentures")
held by Ideal Performance Limited (a corporation controlled by Mr.
Choi) have been amended by the Corporation resulting in additional
common shares of the Corporation (the "Shares") becoming issuable to
the debentureholders (the "acquisition").
On December 31, 2010, the Corporation amended the terms and conditions
of the Debentures to as follows: (a) the Debentures bear an interest
rate equal to 1% per annum (reduced from 9% per annum); (b) the
Debentures are convertible at the holder's option into Shares at the
conversion price of $0.55 per Share (reduced from $0.80 per Share); (c)
the Debentures are redeemable at the Corporation's option into Shares
at the redemption price of $0.55 per Share (reduced from $0.80 per
Share) if the 20-day volume weighted average price of the Shares listed
on the Toronto Stock Exchange (the "TSX") exceeds $1.10 per Share
(reduced from $1.60 per Share) and if the daily trading volume of
Shares in each of the previous 20 consecutive trading days prior to the
redemption date equal or exceed 10% of the aggregate number of Shares
to be issued upon redemption of the principal amount (together with
accrued and unpaid interest) on a cumulative basis, then the
Corporation may satisfy its obligation to make the redemption payment
by delivering that number of Shares equal to the amount due divided by
$0.55 per Share (reduced from $0.80 per Share) and that number of
Shares equal to the accrued interest thereon divided by: (a) $0.55 per
Share (reduced from $0.80 per Share), if the market price of the Shares
at the time of redemption is equal to or less than $0.69 per Share
(reduced from $1 per Share), or (b) by the market price immediate prior
to the redemption date less the maximum discount allowed by the TSX if
the market price of the Shares exceeds $0.69 per Share (reduced from $1
per Share); and (d) the maturity date is September 19, 2013 (extended
by two years from September 19, 2011).
The original distribution of the Debentures to Ideal Performance Limited
(a company wholly controlled by Mr. Choi) was 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.
Prior to the proposed acquisition of the Debentures, Mr. Choi directly
owned 106,937 Shares, representing approximately 0.12% of the
Immediately following the acquisition of the Debentures and assuming the
full conversion of only the Debentures expected to be owned by Mr.
Choi, Mr. Choi would beneficially own 2,834,210 Shares, representing
approximately 3.05% of the then enlarged total issued and outstanding
Shares. Upon any redemption by the Corporation, Mr. Choi may control a
maximum 2,940,013 Shares (including principal and maximum interest both
payable in Shares) representing approximately 3.16% of the then
enlarged total issued and outstanding Shares.
Dr. Jonathan Koon Shum Choi ("Dr. Choi"), who is related to Mr. Choi and
is a director of the Corporation, holds Debentures with a principal
amount of $4,500,000. Dr. Choi currently beneficially owns or controls
61,697,310 Shares and immediately following the acquisition, assuming
full conversion of only the Debentures held by him, Dr. Choi will
beneficially own 69,879,128 Shares, representing approximately 70.93%
of the then enlarged total issued and outstanding Shares.
Immediately following the acquisition and assuming full conversion of
only the Debentures owned or controlled by Mr. Choi together with Dr.
Choi, they are expected to beneficially own or control, directly and
indirectly, 72,713,338 Shares representing approximately 71.82% of the
then enlarged total issued and outstanding Shares. Upon any redemption
by the Corporation, Dr. Choi may control a maximum 70,196,538 Shares
(including principal and maximum interest both payable in Shares)
representing approximately 71.02% of the then enlarged total issued and
outstanding Shares. After such acquisition, Dr. Choi would remain the
largest controlling shareholder of the Corporation and there would be
no effect on the control of the Corporation.
Mr. Choi beneficially acquired 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 National Instrument 62-103 -
The Early Warning System and Related Take-Over Bid and Insider
Reporting Issues, 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
SOURCE Kingsway International Holdings Limited
For further information:
A copy of the Early Warning Report may also be obtained by contacting Gary Quedado at (416) 861-3099 ext 238.