Sponsored By

Savvis to Reverse-Split

Holders of Savvis' Series A Preferred stock have agreed to exchange their Preferred for approximately 561 million shares of common stock

May 10, 2006

2 Min Read

ST. LOUIS -- SAVVIS, Inc. (NASDAQ:SVVS), a leading global provider of managed and outsourced IT services, today announced that holders of its Series A Preferred stock ("Preferred") have agreed to exchange their Preferred for approximately 561 million shares of the company's common stock. The company also announced that its Board of Directors has approved a 1-for-15 reverse stock split as authorized by stockholders. The reverse split is scheduled to take place on June 6, 2006. The exchange is anticipated to take place within six to eight weeks, subject to certain closing conditions.

SAVVIS Chief Executive Officer Phil Koen said, "Exchange of the Preferred by SAVVIS' majority stockholders demonstrates their recognition of the significant progress the company has made over the past three years, and their confidence in SAVVIS' future. We believe this simplification of our capital structure, combined with a reverse stock split, will appreciably increase the attractiveness of SAVVIS' common stock. We look forward to building on this important event with continued successful growth of our company."

The exchange consideration of 561 million shares includes 423 million shares accrued through March 31, 2006, and 139 million additional shares, representing approximately 58% of the shares Preferred holders were entitled to receive through the redemption date of March 2010. The Preferred accrues non-cash dividends at 11.5% per year and is convertible to common stock at a price of $0.75 per share. If the Preferred were not redeemed in March 2010, that dividend would increase to 20%. Total value of the outstanding Preferred as of March 31, 2006, was approximately $317 million, or the equivalent of 423 million shares of common stock.

SAVVIS had the option of redeeming the Preferred for cash in March 2010. Dividends through that date, as converted, would equal approximately 663 million shares of common stock, based on an accumulated value of $497 million, or an increase of approximately 240 million shares from March 31, 2006.

Savvis (Nasdaq: SVVS)

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like