Foamex sets 1-for-4 reverse stock split
By Furniture Today Staff -- Furniture Today, March 26, 2007
Linwood, Pa. — Foam supplier Foamex International plans a reverse stock split of its common stock at a ratio of one-for-four.
The company said its board and a majority of its shareholders have agreed to amendments to Foamex's charter to permit the move. The reverse stock split will affect all shares of common stock.
"We believe this action will create more liquidity, increase awareness of Foamex's shares among potential investors, and enhance the company's value for all stockholders," said Raymond Mabus, chairman and CEO.
Foamex's board also approved and holders of a majority of the outstanding common stock consented to an amendment to the company's charter to eliminate restrictions on the trading of its common stock. Foamex previously reported that, as permitted by the charter, its board had caused these restrictions to expire on Feb. 12.
The company said it will file a statement with the Securities and Exchange Commission describing the proposed reverse stock split and amendment regarding the removal of trading restrictions in greater detail, and mailed the statement to stockholders of record as of March 6.
Once the stock split is implemented, Foamex's common stock will continue to trade on the OTC Bulletin Board on a split-adjusted basis, under the current stock symbol FMXI. No fractional shares will be issued in connection with the reverse stock split. Fractional shares will be aggregated and sold by the company's exchange agent, and the resulting cash will be paid in lieu of the fractional shares.
The reverse split, which will become effective 20 days after the mailing of the information statement, is expected to take place in the second quarter.
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