Kingsway Financial Services (KFS) has entered into a definitive purchase agreement with Westaim pursuant to which, the company will sell all of the issued and outstanding shares of Jevco Insurance Company (Jevco) to Westaim.
The agreement is subject to standard closing conditions, including receipt of the approval of the Minister of Finance (Canada). The aggregate purchase price is approximately 94.5% of the book value of Jevco as at December 31, 2009, subject to adjustments.
KFS will also receive a dividend of up to CAD40m from Jevco prior to closing of the transaction and subject to insurance regulatory approval. The approval of Westaim shareholders will also be required in connection with associated financing activities. However, the completion of the transaction is not conditional on financing.
KFS said that it plans to purchase sufficient company debt to satisfy all financial covenants contained in bond agreements to which the company and its affiliates are a party. The conditional debt repurchase agreements have been executed in respect of approximately $47m of the debt to ensure the completion of the debt purchase transactions.
Kingsway Financial Services is a provider of non-standard automobile insurance in North America.