[miningmx.com] – HARMONY Gold is to consider the merits of a reverse stock split, among other measures, in order to keep its shares trading on the New York Stock Exchange (NYSE) following a 64% decline in value this year.
The company’s shares, which are available in New York as American Depository Receipts or ADRs, are currently trading at about 69 cents/share compared to $1,94 per share in January.
In terms of NYSE regulations, Harmony’s minimum ADR average closing price should not trade at less than $1/share over a period of 30 consecutive trading days. The company was consequently notified by the NYSE its ADRs had fallen below this average.
Harmony has six months from the notice to comply with the minimum share requirement during which time the ADR programme may continue as before. This event also happened to DRDGold several years ago.
Harmony said it was considering alternatives such as “… changing the ratio between the ADRs and the underlying ordinary shares (also referred to as a “reverse stock split’) – to cure the share price deficiency”.
A reverse stock split, or stock consolidation, decreases the number of shares in issue so that the value of each discrete share increases.
“Any action taken to ensure compliance is not expected to affect Harmony’s market capitalisation,” the company said. Harmony is currently capitalised at $309m.
