LSB gets shareholder approval to amend $3.25 preferreds

By Jennifer Chiou

New York, March 6 - LSB Industries, Inc. said it obtained shareholder approval to amend the certificate of designation of its $3.25 convertible exchangeable class C preferred stock, series 2.

The approval is one condition of the company's offer to exchange shares of its common stock for up to 309,807 of the 499,102 outstanding shares of its $3.25 convertible preferreds.

Under the agreement with Jayhawk Capital Management, LLC, the shareholders agreed to amend the terms of the preferreds to allow LSB Industries to acquire shares of its common stock for a period of five years without the approval of the preferred shareholders and to change the existing right of the preferred shareholders to elect two directors to the company's board of directors when dividends on the convertible preferreds are unpaid so that the right may only be exercised as long as at least 140,000 shares of the preferreds remain outstanding.

LSB previously said it will issue 7.4 common shares in exchange for each preferred share and the waiver of all rights to accrued dividends.

The offer ends on March 12.

As of Dec. 31, the accrued dividend on the preferred shares was $23.975 per share.

As previously announced, the company entered into an agreement with Jayhawk Capital and some of its affiliates, under which Jayhawk agreed to tender in the exchange offer 180,450 of the 346,662 preferred shares it owns.

As already reported, the company said that as a condition to Jayhawk's obligation to tender the shares, chairman of the board and chief executive officer Jack E. Golsen and the Golsen group will exchange only 26,467 of the 49,550 preferred shares they own.

The company's board approved the exchange offer on Jan. 29. It began on Feb. 9.

LSB is an Oklahoma City-based manufacturer of climate-control products.

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