The Canadian Press

Kingsway Financial Services Inc. has donated all of its holdings in Walshire General Assurance Co. — sole shareholder of Lincoln General Insurance — to charity, another step in the troubled company’s restructuring.

The donation announced Monday removes Lincoln General from Kingsway’s stable of companies. The charity was not identified.

“Kingsway is of the view that disposing of Lincoln General at this time will provide all stakeholders, including policyholders, shareholders and creditors with improved long-term value and is consistent with Kingsway’s prior determination that it will not continue to voluntarily fund Lincoln General’s reserve shortfalls,” the Toronto-based company said in a statement.

Kingsway, which has endured several quarters of poor financial results as well as a revolt by dissident shareholders, said the donation will also help it meet regulatory and contractual obligations, including servicing a US$10 million surplus note facility agreement.

Other than the surplus note facility, other Lincoln General obligations on Kingsway were not considered material, Kingsway said.

The company said it has also sold substantially all of the assets of Avalon Risk Management Inc.

Kingsway, headquartered in Mississauga, Ont., deals principally in non-standard insurance for individual and businesses in Canada and the United States.

In Canada, they provide insurance to car drivers who do not meet the criteria for coverage by standard automobile insurers.

The company, which also operates reinsurance subsidiaries in Barbados and Bermuda, is in the process of a major restructuring and consolidation.

In January, it announced it would cut 750 jobs or about 28 per cent of its North American workforce of about 2,640 over the next two years and that it would quit some businesses and sell assets.

Meanwhile, a corporate restructuring aims to cut costs by $80 million annually as Kingsway consolidates operations in both the U.S. and Canada.

The moves followed a revolt by a dissident shareholder group headed by New York-based Joseph Stilwell, which took two seats on the Kingsway board and nudged out then-CEO Shaun Jackson out as a director. Jackson was replaced as CEO in April by Colin Simpson.

Kingsway stock rose 22¢ or more than 5% to $4.54 Monday on the Toronto Stock Exchange.