Tulsa’s Laredo Petroleum is among the latest energy companies proposing a reverse stock split as an economic move to survive in the plummet of oil prices and the impact of the coronavirus.
The company notified shareholders this past week of its proposal to be decided at the upcoming May 14 annual meeting scheduled for now, to be held in person at the Bank of America, 15 West 6th street in Tulsa at 9 a.m.
The decision to propose the reverse stock split was made by the Board of Directors in a March 17 meeting, a move that will reduce the number of shares of outstanding common stock. The ratio of shares will be determined by the board within a range of one for five and one for 20 currently outstanding.
“If this proposal is approved by our stockholders and the Reverse Stock Split is effected, between every 5 to 20 outstanding shares of Common Stock would be combined and reclassified into one share of Common Stock. Additionally, if this proposal is approved by our stockholders and the Authorized Share Reduction is effected, the number of authorized shares of Common Stock would be proportionally reduced by the Reverse Stock Split ratio, resulting in a decrease from 450,000,000 authorized shares of Common Stock to between approximately 22,500,000 shares of Common Stock and 90,000,000 shares of Common Stock. We will pay cash in lieu of fractional shares resulting from the Reverse Stock Split,” stated the proxy statement filed with the Securities and Exchange Commission.
Under the proposed amendment, the directors would determine when to actually stage the reverse stock split.
The proposed split comes after Laredo began money-saving steps in 2019 including a 20% cut in the company workforce one year ago as well as some executives, a move that the company said resulted in savings of more than $30 million a year. The current employment, according to the company proxy statement is 280.
It was in late March when Laredo was notified that it faces a possible delisting from trading on the New York Stock Exchange because its shares had traded for less than $1 for at least one month.
Source: SEC