Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, August 6, 1993 TAG: 9308060117
SECTION: BUSINESS PAGE: B5 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
The effort is aimed at raising enough capital to take the institution off federal regulators' endangered list and end a long-running dispute with the government.
Charter Federal shareholders have until 5 p.m. today to exercise their right to buy a new issue of the thrift's stock. Early indications were the sale would be successful.
The offering, begun on July 12, gave shareholders subscription rights that could be traded later for new shares of common stock. The company has 3.7 million shares outstanding and plans to issue 21.8 million new shares.
Charter had reserved the option of extending the deadline past today to the end of the month, saying the plan was conditioned on shareholders indicating they would buy at least 20.65 million shares.
Cecil R. McCullar, president of the Bristol-based thrift, said Thursday the deadline will not be extended.
He had no figures on the response rate Thursday, but Charter has enough stand-by buyers to be able to sell all of the new stock.
Closing of the stock issue, meaning conversion of the rights to common stock, is scheduled for next Thursday, McCullar said.
The company plans to announce by the middle of next week the final figures for the stock sale.
Under the plan, existing stockholders can buy 5.95 new shares for each share of Charter Federal stock they hold. The cost is $2 a share. The stock traded Thursday in the range of $2 to $2.06 1/4.
The company has said that two large shareholders - each of whom owns more than 5 percent of its outstanding stock - along with the company's directors, institutional investors and other large investors, are acting as stand-by purchasers of the new stock rights.
Charter Federal said their commitment will satisfy conditions of the sale.
Money raised in the stock sale will allow Charter to reach minimum government standards for capital investment. Charter fell below those standards when, through an accounting treatment, it wrote off "goodwill" for taking over several failed thrifts many years ago. The thrift lost a court case in which it attempted to keep that accounting method.
The company operates 26 offices in the Roanoke Valley, Southwest Virginia and northeastern Tennessee.
by CNB