Joseph Bonney | Oct 13, 2011 8:41PM EDT
Note: This story corrects an earlier report that erroneously reported Horizon’s refinancing left bondholders with a majority of the company’s stock, and that misstated the reason for Horizon’s trading suspension by the NYSE.
The New York Stock Exchange said it will suspend trading in Horizon Lines stock before the market opening Thursday because the company’s average capitalization over 30 trading days fell below $15 million.
Falling below the NYSE standard triggers an automatic suspension and delisting process. Horizon said its stock will be traded over the counter through the appeals process, under a symbol to be determined.
Horizon this month completed a $652.8 million refinancing that included an exchange of convertible notes for new notes and stock and warrants. Under the refinancing the company issued 25.1 million new shares. Horizon had 30.9 million outstanding shares before the issuance.
Horizon stock closed Thursday at 32 cents a share. Its 52-week high was $5.95 before the company agreed last February to plead guilty to a felony antitrust violation for price-fixing in the Puerto Rico trade.
Under the plea agreement, Horizon agreed to a $45 million fine, later reduced to $15 million, that threatened the company with debt defaults and necessitated the refinancing. Horizon said the refinancing put the company on sound financial footing.
“The transition from the NYSE to the OTC does not place us in violation of our new refinancing agreements,” a Horizon spokesperson said. “More importantly, it does not reflect the underlying financial soundness of our company. In fact, our recent successful refinancing positions our company with adequate liquidity to fund continuing operations and affords us the opportunity to grow our business and reduce debt over time.”
Horizon is the largest U.S. domestic ocean carrier. It operates in domestic trades between the U.S. mainland and Puerto Rico, Alaska, Hawaii and Guam, and has an international service from China to the U.S. West Coast.
Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.
