A special stockholders meeting is planned for September by Oklahoma City-based LSB Industries, Inc. in which they’re asked to approve an exchange agreement with LSB Funding LLC, an affiliate of Eldridge Industries, LLC.
LSB’s Board of Directors is recommending approval of the proposed exchange of shares held by Eldridge for shares of LSB common stock.
Eldridge is the holder of LSB Series E-1 and Series F-1 Redeemable Preferred stock. Under terms of the agreement, LSB would exchange approximately $310 million of preferred stock held by Eldridge into an equivalent value of LSB common stock.
A proxy filing with the Securities Exchange Commission indicated that in connection with the transaction, stockholders would receive a special dividend in the form of 0.30 shares of LSB common stock for every share owned as of the record date.
The special meeting is set for Sept. 22, 2021 at 8:30 a.m. Central Daylight Time.
The board of directors explained the transaction, if approved, would eliminate the current financial impact and repayment of the accrued compounding preferred stock and future accruing dividends at 14.5% “unburdening the company and unlocking shareholder value.”
The board and LSB executives indicated in the SEC filing that they also believe the transaction could lead to a rating upgrade which could allow the firm to refinance its senior secured notes at a lower interest rate.
Source: Business Wire