C&D Technologies, Inc. (PINK:CHHP) picked up some trading volume and price action after its stockholders approved a major exchange of convertible notes as well as a financial restructuring plan.
Trading volume only slightly topped the average, but the share price increase of more than 46% put the stock among the outstanding gainers of the day. The price has broken the trading channel as well, plotting out rather attractively from the perspective of technical analysis. However, the increase in the common shares number and the debt restructuring pose a serious threat of price collapse.
The major changes will manifest in C&D’s debt structure, cutting the current $175 million owed to just $50 million. Most of this effect will be achieved by exchanging to common stock nearly all of the outstanding senior convertible notes that were due in 2025-2026. The exchange should be carried out by December 31. [BANNER]
Shareholders also approved the changes in the company’s certificate of incorporation. This allowed the board of directors to carry out a 1.37336:1 forward stock split, as well as increase the authorized number of common shares from 75 million to 600 million effective December 21, 2010.
This restructuring doesn’t have effects on the company’s performance, thus even if they got rid of the debts the operations remain loss making and additional capital will be required in the future.
