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South Financial begins exchange offer for 10% convertible preferreds
By Angela McDaniels
Tacoma, Wash., Aug. 20 - South Financial Group, Inc. is offering to exchange shares of its common stock for four series of its 10% mandatory convertible non-cumulative preferred stock, according to a company news release.
The series covered by the offer are the series 2008ND-V, 2008ND-NV, 2008D-V and 2008D-NV preferreds.
For each preferred tendered and accepted, South Financial will issue 153.846 common shares plus a number of common shares equal to $131.25 divided by the average of the daily volume-weighted average per-share price of its common shares on each of the five consecutive trading days ending on Sept. 16, subject to a maximum exchange ratio of 241.346 common shares per preferred.
The total number of shares to be issued will be announced in a press release on Sept. 17.
The maximum exchange ratio of 241.346 shares was worth $429.60 as of Aug. 19, when the company's stock closed at $1.78 (Nasdaq: TSFG).
The exchange offer will expire at 5 p.m. ET on Sept. 18.
South Financial said the successful completion of this offer will improve its capital structure by reducing its future preferred stock dividend payments and increasing its tangible common equity to tangible assets ratio.
On Aug. 19, the board of directors agreed to suspend the $0.01 quarterly dividend on the common stock due to its belief that payment of a dividend on the common stock is inconsistent with the overall objective of the company's capital plan, which is to preserve and generate capital.
Registrar & Transfer Co. (800 368-5948) is the exchange agent for the exchange offer, and Altman Group (800 254-9280) is the information agent.
South Financial is a bank holding company based in Greenville, S.C
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