Arch Coal starts offer to encourage conversion of 5% preferreds

New York, Dec. 1 - Arch Coal, Inc. said it has begun an offer to encourage early conversion of its 5% perpetual cumulative convertible preferred stock.

The St. Louis coal producer will pay a premium of $3.50 in stock in addition to the regular conversion rate to holders who take advantage of the offer.

The amount of stock for the premium will be calculated using the volume-weighted average of the reported closing sales prices of Arch's stock on the New York Stock Exchange during the five trading days ending at the close of the second trading day before expiration of the offer.

Under these terms, the preferreds currently convert into 2.3985 shares each.

The offer ends at midnight ET on Dec. 29.

Arch said it is carrying out the offer to reduce its fixed dividend obligations and to improve its overall credit standing.

Arch stock closed at $79.38 Thursday.

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