GLENDALE, Calif - Glendale Federal Bank said it has started soliciting the consents needed to approve the reclassification of its 12% noncumulative perpetual preferred stock into a new series D noncumulative convertible preferred.
Each 100 shares of the Glenfed Inc. unit's series B and series C perpetual preferred would be converted into 24 shares of series D. The par value will be $1 and the liquidation preference $25 a share.
As a result, 13.8 million existing preferred shares will be reclassified into 3.3 million of series D. At the effective date of the transaction, existing holders will get about 6.5 million rights to purchase common shares at the rate of 47 rights for each 100 preferred shares.
Part of Recapitalization
The transaction is part of a previously announced recapitalization that involves the merger of Glenfed Inc. into a subsidiary of Glendale Federal Bank, along with other financing moves.
The series B and C reclassification is subject to an approval vote by at least two-thirds of those outstanding shares.
The purchase of $125 million of additional convertible preferred stock and of $150 million of standby purchase commitments would be completed before or concurrently with completion of the merger, the exchange offer, and the reclassification, Glendale Federal said.
Members of an informal steering committee of series B and series C preferred-stock holders, which have 75% of the outstanding preferred shares, have informed the thrift that they are prepared to recommend approval of the reclassification.
Dividends on the series D convertible preferred stock will be noncumulative and 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.
The deadline for the consents by series B and series C holders is midnight eastern time on Aug. 4, unless extended by Glendale Federal. Preferred holders will have the right to revoke their consents and waivers at any time before the deadline.