HONG KONG, Jan. 5 /CNW/ - Dr. Jonathan Koon Shum Choi ("Dr. 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 $4,500,000 (the "Debentures")
held by Sun Wah Capital Limited (a corporation controlled by Dr. 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 Sun Wah Capital Limited
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, Dr. Choi beneficially held, directly
and indirectly, 61,697,310 Shares, representing approximately 68.30% of
the outstanding Shares. Of the 61,697,310 Shares, 36,966,159 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 10,653,096 Shares are held
directly by Dr. Choi.
Immediately following the acquisition, on a fully-diluted basis, Dr.
Choi beneficially holds, directly and indirectly 69,879,128 Shares,
representing approximately 70.93% 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. Michael Koon Ming Choi ("Mr. Choi"), who is related to Dr. Choi and
is a director of the Corporation, holds Debentures with a principal
amount of $1,500,000. Mr. Choi currently beneficially owns or controls
106,937 Shares and immediately following the acquisition, assuming full
conversion of only the Debentures held by him, Mr. Choi will
beneficially own 2,834,210 Shares, representing approximately 3.05% 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 Dr. Choi together with Mr.
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, 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. 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.
Dr. Choi beneficially acquired 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 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.
"Jonathan Koon Shum Choi"
JONATHAN KOON SHUM CHOI
SOURCE Sun Wah Capital 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.