Fedders Corporation, a global manufacturer of HVAC equipment, announced that its Board of Directors has authorized the distribution of transferable rights to holders of the Company's Common Stock and Class B Stock, which will entitle the holder to subscribe for newly issued shares of the Company's Series A Cumulative Preferred Stock, which currently trade on the New York Stock Exchange under the symbol "FJCPRA."
Stockholders will receive one right for each share of Common Stock and Class B Stock they hold. Every 20 rights will entitle a stockholder to purchase one share of Preferred Stock. The company expects that the rights will trade on the New York Stock Exchange.
The subscription price per share of Series A Cumulative Preferred Stock has been set at U.S. $23.70, a 6.3-percent discount from the closing price of the stock on December 4, 2003 of $25.30. Based upon the subscription price, the annual dividend rate of $2.15 per share of Series A Cumulative Preferred Stock yields approximately 9.1 percent. Shares of Series A Cumulative Preferred Stock are not callable and holders are entitled to the recently reduced tax rate of 15 percent on dividends received.
The record date for determining the stockholders entitled to participate in the offering has not yet been established. Fedders said it anticipates that the offer will commence in December 2003. If fully subscribed, the offer is expected to raise in excess of $36 million.
The proceeds of the offering will be used for possible strategic acquisitions, to decrease the use of debt for working capital, and for general corporate purposes, the company said.
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