ALERT! FRO asks shareholders to accept a rise of A/S to 625 mill. shares, a 5 to 1 forward split! A/S now 125 mill. and O/S 74.8 mill. shares. What's up?
I, however, think this is a long term project and Fredriksen just wants to have the possibility at hands if and when needed. Hopefully some clarification will come out at the next Thursday conference call.
"PROPOSAL 7 from the FRO Proxy statement: – SUB-DIVISION OF SHARE CAPITAL
The Company’s authorised share capital is currently 125,000,000 Ordinary Shares of par value $2.50 each. At July 31, 2008 the Company’s issued share capital was 74,825,169 Ordinary Shares of $2.50 each and at that date the closing share price of the Ordinary Shares on the New York Stock Exchange was $64.17. The Board of Directors proposes that the shareholders approve to sub-divide the Company’s authorized share capital of 125,000,000 Ordinary Shares of par value $2.50 each into an authorized share capital of 625,000,000 Ordinary Shares of par value $0.50 each (the “Stock Split”). No change in total stockholders' equity will result from the Stock Split.
The Board of Directors does not intend at this time to set a record date for the effectiveness of the Stock Split but instead wishes to use the authority given by the shareholders to set a record date at such future date as the Board deems appropriate. If the Stock Split is approved, on such future record date each holder of Ordinary Shares will be entitled to receive five (5) Ordinary Shares of par value $0.50 each in exchange for each one (1) Ordinary Shares of par value $2.50 each held.
The Board of Directors believes that in the appropriate market circumstances, the Stock Split would be in the Company's best interests in order to lower the per share market price of the Ordinary Shares, increase trading activity and broaden the marketability of the Ordinary Shares"
