Cash, heres example, guess
preferred can be reversed.
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Savvis Inc. said Wednesday that its preferred stock would be exchanged for shares of common stock, and the company has scheduled a 1-for-15 reverse split.
Holders of Savvis' Series A preferred stock have agreed to exchange their shares for about 561 million shares of the company's common stock, the firm said in a release.
Savvis' 1-for-15 reverse stock split, authorized by stockholders in April, is scheduled for June 6. The company said the exchange is expected to take place within six to eight weeks, subject to closing conditions.
In a statement, Savvis CEO Phil Koen said of the exchange, "We believe this simplification of our capital structure, combined with a reverse stock split, will appreciably increase the attractiveness of Savvis' common stock."
Holders of 99 percent of the newly issued common stock will be prohibited from selling it in the open market through Nov. 1, the company said.
Welsh, Carson, Anderson & Stowe and certain affiliates will remain Savvis' controlling stockholder, with approximately 59 percent of outstanding shares following the exchange, according to the release.
The exchange of preferred stock will bring Savvis' total common stock issued and outstanding to about 749 million shares, the company said. After the reverse split, Savvis' will have about 50 million shares of common stock outstanding.
Jack Finlayson, Savvis' president and chief operating officer, said in a statement, "The creation of a single class of equity, and elimination of the dilution imposed by the preferred dividend, benefits our customers, employees, and investors."
St. Louis- and Herndon, Va.-based Savvis Inc. (Nasdaq: SVVS) provides networking, Internet and application services to financial services companies and midsize businesses.
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