Canadian Underwriter

Kingsway estimates $39-million loss in 2009 Q4; completes sale of Jevco

March 31, 2010   by Canadian Underwriter

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Kingsway Financial Services Inc. (TSX: KFS, NYSE: KFS) has reported a preliminary, unaudited operating loss of $39 million in 2009 Q4.
The company also completed the sale of Jevco Insurance Company to the Westaim Corporation on Mar. 29. The sale was worth $264.2 million.
The operating loss includes a $28-million loss in the U.S. operations due to legacy claim issues associated with the Universal Casualty Company business ($21 million), historical commercial products ($7 million) and $11-million in “additional operating losses.”
Kingsway saw its share value drop from $5.31 at the end of 2009 Q3 to $1.95 by the end of 2009 Q4, a company statement says.
A portion of the proceeds of the sale of Jevco “will be used to purchase sufficient company indebtness to ensure that it continues to satisfy all financial covenants contained in bond agreements to which the company and its affiliates are party,” a release says.

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