Kingsway and Atlas Signs Non-Binding Letter of Intent For Sale of Shares

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Kingsway Financial Services Inc. announced that they have entered into a non-binding letter of intent with Atlas Financial Holdings, Inc.

The non-binding letter of intent deals with the sale of its Atlas preferred a share which is for 90% of the liquidation value. Estimated price of the sale would be at US$16.2 million.

The structure of the transaction was released and it is as follows:

  • Upon execution of definitive agreements, Atlas will pay Kingsway $7.5 million in cash.
  • The remaining sale proceeds are expected to be funded primarily from cash raised by Atlas from the exercise of outstanding Atlas warrants which expire on December 31, 2013.
  • Any amounts which remain unpaid after December 31, 2013 are intended to be reflected in promissory notes with due dates not later than April 30, 2014. To the extent there is a balance owing, an annual interest rate of 4.5% will apply to such balance through the final payment date.

Kingsway is a holding company functioning as a merchant bank with a focus on long-term value-creation.

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