Wahlco Environmental Systems Inc. plans to offer shareholders the right to purchase common stock at a substantial discount.
The offering applies to shareholders other than its majority shareholder, WES Acquisition Corp.
To reduce the number of shares outstanding, the company also said Thursday that it plans a reverse stock split, subject to the approval of the New York Stock Exchange, after the rights offering.
The company said shareholders will be issued eight rights for each share owned. Each right will entitle the holder to purchase one common share at 10 cents a share, an 89% discount from the common stock price at the market close Sept. 17. Wahlco stock was unchanged Thursday at 88 cents a share.
The company, which designs and makes air pollution control equipment, said it plans to use a portion of the proceeds from the rights offering to reduce its external debt and to invest in its higher margin service businesses.