Doral Financial Corporation today announced a 1-for-20 reverse stock split of its common stock that will be effective June 28, at 4 p.m.
At its annual meeting of shareholders held on June 19, 2013, Doral’s shareholders granted to the board of directors the authority to implement a reverse stock split at their discretion, and if it did so, the authority to determine the exact reverse stock split ratio within an approved range.
Subsequent to the shareholders’ approval of the reverse stock split the bank’s board of directors decided to set the reverse stock split ratio at one new share of common stock for each 20 shares currently outstanding, Doral said in a statement issued this morning.
Doral’s common stock will begin trading on the NYSE on a split-adjusted basis when the market opens July 1.
When the reverse stock split becomes effective, every 20 shares of issued and outstanding common stock will be automatically combined into one issued and outstanding share of common stock without any change in the par value per share.
As a result of the reverse stock split, the number of issued and outstanding shares of the Company’s common stock will be reduced from approximately 134 million to approximately 6.7 million and the number of authorized shares of common stock will be proportionally reduced from 300 million to 15 million.
Proportional adjustments will also be made to the company’s stock incentive plans.
The reverse stock split will have no effect on Doral’s preferred stock, which will remain at 40 million authorized shares with approximately 6 million shares issued and outstanding; however the number of shares of common stock into which the company’s 4.75 percent perpetual cumulative convertible preferred stock is convertible will be proportionally reduced.
No fractional shares will be issued in connection with the reverse stock split.