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GLENDALE FEDERAL BANK COMMENCES SOLICITATION OF CONSENTS TO RECLASSIFICATION OF SERIES B AND SERIES C PREFERRED STOCK

 GLENDALE, Calif., July 15 /PRNewswire/ -- Glendale Federal Bank, the principal subsidiary of GLENFED Inc. (NYSE: GLN), today announced that it has commenced a solicitation of consents to approve the reclassification of its 12 percent Noncumulative Perpetual Preferred Stock, Series B and Series C into a new class of preferred stock designated Noncumulative Convertible Preferred Stock, Series D. Holders of the Series B and Series C Preferred Stock will receive 24 shares of Series D Convertible Preferred Stock for each 100 shares of Series B and Series C Preferred Stock outstanding. The new convertible preferred stock will have a par value of $1.00 and a liquidation preference of $25.00 per share.
 Under the terms of the proposed reclassification, approximately 13.8 million shares of Series B and Series C Preferred Stock would be reclassified into approximately 3.3 million shares of Series D Convertible Preferred Stock. With the reclassification, the bank would issue to the holders of the Series B and Series C Preferred Stock of record as of the effective date of the reclassification approximately 6.5 million rights to purchase shares of bank common stock at the rate of 47 rights for each 100 shares of existing preferred stock.
 The reclassification is a part of the bank's previously announced recapitalization plan which contemplates, in addition to the reclassification, the merger of GLENFED into a subsidiary of Glendale Federal Bank, the exchange of GLENFED's 7.75 percent Convertible Subordinated Debentures Due 2001 into bank common stock and rights, an offering of $125 million of additional convertible preferred stock of the bank, and a $250 million to $300 million rights offering of common stock of the bank. The rights offering would be backed by $250 million of standby purchase commitments from institutional and other investors.
 The reclassification is subject to the approval of the holders of at least two-thirds of the outstanding shares of Series B and Series C Preferred Stock. It is expected that the purchase of the $125 million of additional convertible preferred stock and of $150 million of the standby purchase commitments would be completed prior to or concurrently with completion of the merger, the exchange offer and the reclassification.
 Members of an informal steering committee of Series B and Series C Preferred Stock holders which hold 75 percent of the shares of the outstanding preferred stock, including 100 percent of the shares of Series C Preferred Stock, have informed the bank that they are prepared to recommend to their respective companies and principals that they consent to the reclassification.
 "We are extremely pleased that the preferred stockholders committee, which represents a sufficient amount of the outstanding preferred stock to assure approval of the reclassification, has approved this important step in the bank's recapitalization. The support of the committee virtually assures the successful completion of this aspect of our efforts to recapitalize the bank," commented Stephen Trafton, chairman and chief executive officer.
 Dividends on the Series D Convertible Preferred Stock will be noncumulative and will be payable, if declared, quarterly on the first day of January, April, July and October, commencing Jan. 1, 1994. Dividends will be payable at an annual rate, expressed as a percentage of the per share liquidation preference of the Series D Convertible Preferred Stock, that will be equal to the dividend rate on the comparable convertible preferred stock to be issued and sold in the additional offering.
 Each share of Series D Convertible Preferred Stock will be convertible into shares of bank common stock, at the holder's option, commencing 13 months after initial issuance. The conversion price will be determined as a premium over the price of the bank common stock at the date of original issuance of the Series D Convertible Preferred Stock and will be the same conversion price as the comparable convertible preferred stock to be issued and sold in the $125 million additional offering of preferred stock that is part of the recapitalization plan. The conversion price will be subject to adjustment in certain events.
 The convertible preferred stock will be redeemable (unless previously converted) at the bank's option at any time after four years from the date of initial issuance, at a per share redemption price initially fixed at a premium over its per share liquidation preference and declining annually thereafter to the per share liquidation preference of $25, plus any declared and unpaid dividends. The Series D Convertible Preferred Stock will not be redeemable at the option of the Series D Holders.
 The deadline for delivery by Series B and Series C holders of consents to the reclassification is midnight, New York time, on Wednesday, Aug. 4, 1993, unless extended by the bank. Preferred holders will have the right to revoke their consents and waivers at any time prior to the deadline.
 Concurrently with the reclassification, the bank is also soliciting from Series B and Series C Preferred Stock holders consents to certain amendments to the bank Charter under which the Series B and Series C Preferred Stock was issued and certain waivers. The amendments will delete the supplementary charter section and statements of designation of the Series B and Series C Preferred Stock, which include provisions that would authorize the holders of the Series B Preferred Stock under certain circumstances to elect up to one-half of the bank's board of directors, and will relieve the bank from its obligation under the charter provisions to pay a dividend in the form of additional shares of Series B and Series C Preferred Stock for any period prior to the effective date of the reclassification. The reclassification waivers include the waiver of any and all rights to rescind approval of the reclassification and the additional offering or to claim any payments relating to reclassified shares of outstanding preferred.
 The Series D Convertible Preferred Stock holders will be entitled to vote as a class with the bank Common Stock on all matters presented for action by the holders of the bank Common Stock, including the election of directors, with each share being entitled to one quarter of one vote for such purposes. The convertible preferred stock will have certain other limited voting rights in specified circumstances.
 For additional information about the reclassification, including copies of the offering circular/consent solicitation, Series B and Series C preferred holders may contact the Reclassification Exchange Agent, Chemical Bank, at 800-648-8169 on weekdays between the hours of 9 a.m. and 5 p.m. New York time; or Glendale Federal Investor Relations Department at 818-500-2824 on weekdays between 8:30 a.m. and 5 p.m. Los Angeles time.
 -0- 7/15/93
 /CONTACT: Judy Cunningham, 818-500-2274, or Jeff Misakian, 818-500-2824, both of Glendale Federal Bank/
 (GLN)


CO: Glendale Federal Bank; GLENFED Inc. ST: California IN: FIN SU:

JL-MF -- LA006 -- 1779 07/15/93 09:01 EDT
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Date:Jul 15, 1993
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