Alpha Natural Resources Inc. has announced plans to streamline its capital structure.
According to a Dec. 22 press release, Alpha and Alpha Natural Resources Holdings Inc. announced that their respective company boards have approved, in principle, a proposed transaction to streamline capital structure through a reclassification pursuant to which outstanding shares of the existing classes and series of stock will be exchanged for new shares at different exchange ratios.
Alpha also reached preliminary agreement with several large stockholders to support the transactions.
If stockholders approve of the transaction, Alpha Holdings will have a single trading class of common stock as opposed to the current capital structure of common stock and two series of preferred stock, which all trade.
Alpha will have two classes of common stock, one of which will trade, as opposed to its current capital structure of three classes of common stock, one of which trades, and two series of preferred stock that both trade.
"We have heard from our stockholders that the existing structure, with multiple stock classes and distribution rights, makes Alpha more difficult for the market to understand," Alpha CEO David Stetson said in a release. "The proposed streamlining transaction will bring clarity to the markets, help unlock value for our stockholders, and position Alpha for its next phase of development by reducing the number of stock classes and eliminating complexities with respect to corporate governance and economic rights for these numerous stock classes."
Alpha expects to seek stockholder approval of the streamlining transactions at its joint annual meeting on Feb. 15, 2018, as long as the coal producer satisfactorily concludes support agreements with certain large stakeholders about the reclassifications.
The board of Alpha and Alpha Holdings has approved in principle the following exchange ratios for outstanding classes/series of stock: