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Westmoreland Coal exchanges common shares for 90,900 depositary shares
By Jennifer Chiou
New York, May 19 - Westmoreland Coal Co. said it exchanged common shares for 90,900 depositary shares at an exchange ratio of 1.8691 common shares per depositary share, according to an 8-K filing with the Securities and Exchange Commission.
The company said it issued the shares in response to proposals from four of the largest holders of the depositary shares.
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. It announced that it had entered into an agreement to exchange 16,000 depositary shares on May 1.
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.
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