Calgary, Alberta–(Newsfile Corp. – August 8, 2017) – Daniel Gundersen and Kingsway Financial Services Inc. (together, the “Concerned Shareholders”) have issued the following letter to shareholders of Eagle Energy Inc. (TSX: EGL) (“Eagle” or the “Company”) regarding recent events.
Dear Fellow Shareholders,
On August 3, 2017, Eagle announced that we had discontinued our legal challenge to the voting results from the Eagle annual general meeting. We made this decision after we completed a recount of the results. It seems as though we came up less than 6,000 votes short of being in a position to implement some of the changes that Eagle requires. This represents only 0.014% of the outstanding shares of Eagle. We have spent significant time and money working towards the objective of obtaining shareholder representation on the board of directors. We worked hard to gain your support and we greatly appreciate the more than 11 million votes we received.
To be clear, this development does not change our opinions or concerns about Eagle. We continue to believe change is required to increase the probability of success at Eagle. We will not stop our efforts to have shareholders’ concerns addressed and those views represented on the board. To show our commitment to the long term, we have substantially increased our position in the Company since the annual general meeting by purchasing shares in the market.
We are exploring all options for enhancing the long and short-term viability of the Company. To be effective, we have reached out to a number of Eagle shareholders including those that did not support us. As a result of discussions with certain large shareholders, we remain open to viable long-term solutions beyond just asset sales. In our opinion, Eagle should immediately undertake a strategic review to consider all of its alternatives for maximizing shareholder value.
In the near term, we see no reason expenses cannot be reduced drastically. In 2015 Kingsway was involved in a proxy contest against Kobex Capital Corp., since renamed Itasca Capital Corp. In that case, Kingsway found capable and competent management willing to come alongside as owners and manage the business for a salary of $1 per year.
We are not going away. We will be monitoring things closely over the coming weeks and will be pushing for additional changes. We will update the market shortly. In the interim, please contact us with your ideas on how you think we might best maximize shareholder value.
Kingsway Financial Services Inc.
Larry G. Swets Jr., CFA
Daniel Gundersen, P.Eng., CFA
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