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Fleetwood Enterprises Inc. has successfully completed the restructuring of its balance sheet with the conversion of a total of $150 million worth of 9.5% convertible trust preferred securities into common stock.
Fleetwood converted $50 million worth of the securities in early April and it successfully converted the remaining $100 million on Thursday (April 29).
Fleetwood gave the holders of the securities the option of taking cash or Fleetwood common stock in exchange for their securities. But Fleetwood reports that most of the trust-preferred securities were converted into common stock.
As a result, Fleetwood added 14.47 million to the number of common shares it has outstanding. Fleetwood has included those shares in its earnings-per-share calculations.
Fleetwood issued the trust preferred securities, which combine the characteristics of stock and debt , a few years ago after the company reported significant losses and needed to raise cash. The fact Fleetwood had enough available cash to offer to redeem the securities shows the company has made significant progress toward overcoming its financial difficulties, said Lyle Larkin, vice president and treasurer.
Fleetwood assumed the trust preferred securities would be swapped for common stock instead of cash because the holders of the securities were, in effect, paying $10.36 for each share of Fleetwood stock they received, while Fleetwood stock closed at $14.50 a share in New York Stock Exchange trading on Friday (April 30).