TORONTO, July 23, 2013 /CNW/ - (TSX: KFS, NYSE: KFS) Kingsway Financial Services Inc. ("Kingsway" or
the "Company") announced today that a record date of Friday, August 9,
2013 (the "Record Date"), as well as an expiry date of 5:00 p.m.
(Eastern time) on Friday, September 6, 2013 (the "Expiry Date"), has
been set by the Company's Board of Directors for its previously
announced rights offering. The Company expects to mail the rights
offering circular in Canada and the prospectus in the U.S. on or about
Friday, August 16, 2013.
Under the rights offering, each shareholder of record as of the Record
Date will receive, at no charge, one subscription right for each common
share of the Company ("Common Share") owned on the Record Date (the
"Subscription Right"). Four Subscription Rights will entitle the
holder to purchase one unit (a "Unit") consisting of one Common Share,
one Series A Warrant (a "Series A Warrant") and one Series B Warrant (a
"Series B Warrant, and together with the Series A Warrants, the
"Warrants"). Each Warrant entitles the holder to purchase one Common
Share. The subscription price is US$4.00 per Unit. The exercise price
per Common Share for each Series A Warrant is the greater of US$4.50
and 120% of the volume weighted average price of the Common Shares
("VWAP") over the twenty trading day period on the New York Stock
Exchange ("NYSE") ending on such trading day prior to the issuance date
of the Series A Warrants. The exercise price per Common Share for each
Series B Warrant is the greater of US$5.00 and 120% of the VWAP over
the twenty trading day period on the NYSE ending on such trading day
prior to the issuance date of the Series B Warrant. Each Series A
Warrant is redeemable by the Company and has a term of seven years from
its date of issuance. Each Series B Warrant is non-redeemable and has
a term of ten years from its date of issuance. The Company may redeem
the Series A Warrants at a price of US$0.25 per Warrant if, and only
if, the closing price of the Common Shares equals or exceeds US$6.00
per Common Share for twenty consecutive trading days on the NYSE or
such other market or exchange as the Common Shares of the Company trade
on or are quoted at the time of redemption; but in any event, no
earlier than the first anniversary date of issuance. Subject to
applicable securities laws, the Warrants may be exercised at any time
starting on the first day of the thirty-seventh month after the date of
issuance until any time before 5:00 pm (Eastern time) on or before the
seventh anniversary after the date of issuance for the Series A
Warrants and the tenth anniversary after the date of issuance for the
Series B Warrants. Holders who fully exercise their Subscription Rights
will be entitled to subscribe for an additional amount of Units, if
any, that are not purchased by other shareholders or their transferees
through the exercise of their basic subscription privileges, in an
amount equal to up to five Units for each Unit for which such holder
was otherwise entitled to subscribe. Kingsway reserves the right to
cancel or terminate the rights offering at any time prior to the Expiry
Date and for any reason.
The Subscription Rights and the Warrants will be transferable. The
Subscription Rights will be listed on the Toronto Stock Exchange
("TSX") and are expected to commence trading on August 7, 2013. The
TSX has approved the listing of the Common Shares issuable on the
exercise of the Subscription Rights and the Warrants. The TSX has also
conditionally approved the listing of the Warrants. Listing of the
Warrants is subject to the Company fulfilling all of the listing
requirements of the TSX, including distribution of the Warrants to a
minimum number of public security holders. The Company intends to
request that the Subscription Rights and the Warrants trade on an
over-the-counter market in the U.S.
If all of the Subscription Rights are exercised, the Company expects to
receive net proceeds, after fees and expenses, of approximately US$12.5
million in the aggregate. The Company intends to use the net proceeds
to repay a portion of its US$26.4 million principal amount of 7.5%
senior notes maturing February 1, 2014.
The rights offering will be made only by means of a prospectus in the
U.S. and a rights offering circular in Canada. A copy of the
applicable offering document will be mailed to each shareholder as of
the Record Date. The offering documents contain important information
about the rights offering, and each shareholder is urged to read the
applicable offering document carefully when available and prior to
making a decision to invest in the rights offering. Any questions
about the rights offering may be directed to the information agent
retained by the Company, Georgeson Shareholder Communications Canada
Inc., by calling toll-free 1-888-605-8403.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities
laws of any such state. The securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement becomes
effective.
About the Company
Kingsway is a holding company functioning as a merchant bank with a
focus on long-term value-creation. The Company owns or controls stakes
in several insurance industry assets and utilizes its subsidiaries,
1347 Advisors LLC and 1347 Capital LLC, to pursue opportunities acting
as an advisor, an investor and a financier. The common shares of
Kingsway are listed on the Toronto Stock Exchange and the New York
Stock Exchange under the trading symbol "KFS."
Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934 that are not historical facts, and
involve risks and uncertainties that could cause actual results to
differ materially from those expected and projected. Words such as
"expects", "believes", "anticipates", "intends", "estimates", "seeks"
and variations and similar words and expressions are intended to
identify such forward-looking statements. Such forward-looking
statements relate to future events or future performance, but reflect
Kingsway management's current beliefs, based on information currently
available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and
results discussed in the forward-looking statements, including, without
limitation, our potential inability to complete the proposed rights
offering. For information identifying important factors that could
cause actual results to differ materially from those anticipated in the
forward looking statements, please refer to the section entitled "Risk
Factors" in the Company's 2012 Annual Report on Form 10-K and its
Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.
Except as expressly required by applicable securities law, the Company
disclaims any intention or obligation to update or revise any forward
looking statements whether as a result of new information, future
events or otherwise.
SOURCE: Kingsway Financial Services Inc.