Westmoreland Coal issues more common shares for convertible preferreds

By Jennifer Chiou

New York, July 11 - Westmoreland Coal Co. said it exchanged common shares for 88,918 depositary shares underlying its series A convertible exchangeable preferred stock at an exchange ratio of 1.8691 common shares per depositary share.

The company said it issued the shares in response to proposals from three shareholders.

The Colorado Springs, Colo., coal producer added that each depositary share represents one-quarter of a series A convertible exchangeable preferred share.

Westmoreland Coal previously said the terms of the preferreds allow holders to convert their holdings for 1.708 common shares per depositary share.

The company noted that it will not pay accumulated dividends for the exchanged depositary shares.

While the company can redeem preferred shares at any time for the redemption value of $25.00 plus dividends in cash, Westmoreland Coal said it agreed to the negotiated exchanges as a cash conservation measure and because they reduce the number of outstanding depositary shares and eliminate the associated future dividend requirements and expense.

On May 19, the company exchanged common shares for 90,900 depositary shares at an exchange ratio of 1.8691 common shares per depositary share.

The company added it has now exchanged 179,818 depositary shares at an exchange ratio of 1.8691 and 640,515 depositary shares remain outstanding.

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