Despite initial concerns, Dana Corp. officials say now they believe newly issued shares will be listed on the New York Stock Exchange when the firm emerges from bankruptcy.
"While the listing of the stock of the new Dana on the NYSE is still not certain, we now have a better feel for the fact that it will be possible," spokesman Chuck Hartlage wrote in a statement.
He did not elaborate.
The bankrupt Toledo auto parts producer intends to issue 100 million new shares, most of which will be distributed to creditors for payment of company debt. About 1 million shares will be used to pay bonuses to union employees, with a like number given as bonuses to salaried employees.
Current stock will be become worthless when the new shares are issued. It is traded on a pink sheets over-the-counter and closed yesterday at 20 cents.
The new stock is expected to trade at about $22 each, the firm said.
Initially, company officials raised serious concerns about their ability to get shares listed on a major exchange like NYSE.
"It is unlikely that the new ... stock will qualify for listing at the time it is issued, and there can be no assurance that the ... stock will ever be listed on a national exchange," the company wrote in a bankruptcy court filing this summer.
In the absence such a listing, officials said they planned to "cooperate with any registered broker-dealer who may seek to initiate price quotations for the new ... stock on the over-the-counter bullet board."
The company didn't explain the reason for its reservations. Some experts suggested that executives feared that it wouldn't have the minimum number of shareholders to be listed on a big exchange because the stock generally was to be given to its creditors.
Creditors will begin voting on the company's plan of reorganization within days, and Judge Burton Lifland, of U.S. Bankruptcy Court in New York, will be asked to sign off Dec. 10. If he approves, the company plans to emerge from 19 months of Chapter 11 protection by Dec. 31.
The cash-strapped maker of axles and other vehicle parts filed for protection from creditors in March, 2006.
Contact Gary Pakulski at: firstname.lastname@example.org or 419-724-6082.
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