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McMoRan induces conversion of $99 million 6.75% mandatory convertibles
By Susanna Moon
Chicago, Sept. 22 - McMoRan Exploration Co. agreed in a private deal to induce conversion of $99 million, or 990,000 shares, of its 6.75% mandatory convertible preferred stock into 6.7 million of its common shares, according to an 8-K filing with the Securities and Exchange Commission.
McMoRan will pay $7.4 million in cash to holders of the preferreds.
The deal is based on the minimum conversion rate of 6.7204 common shares for each preferred. The preferreds have a liquidation preference of $99 million.
The induced conversion represents 38% of the 2.6 million preferreds issued in November 2007. After these conversions, 1.6 million of the preferreds, with a liquidation preference of $158.9 million, remain outstanding.
Preferred dividend payment savings related to this deal approximate $15 million through the November 2010 mandatory conversion date of the securities, the company said in the release.
The company's stock (NYSE: MMR) closed at $24.33 on Sept. 21.
McMoRan is a New Orleans-based oil and gas driller with operations in the Gulf of Mexico and on shore along the Gulf Coast.
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