By Bill Bregar, Plastics News
Ansonia, Connecticut-Common stock no longer will be traded for Farrel Corp., after the extruder and mixer manufacturer filed a notice to deregister with the Securities and Exchange Commission.
On 29 Dec, the Ansonia-based company asked the SEC to suspend trading of Farrel shares on the OTC Bulletin Board. In 2001, the stock began trading over the counter after Nasdaq pulled Farrel because the machinery maker failed to meet a Nasdaq deadline to boost its stock value above $1.
Farrel's board of directors listed several reasons for deregistering the stock. The company sees limited trading activity from fewer than 300 registered shareholders. Directors also cited the lack of analyst coverage and dramatically increasing costs to prepare and file SEC reports, especially after passage of the Sarbanes-Oxley Act of 2002.
The company said it would cost more than $300,000 per year to meet Sarbanes-Oxley, the Enron-inspired rule changes that increase requirements for corporate governance, financial disclosure and public accounting at publicly traded companies.
â€œIn a company of Farrel's size and market position, it is impossible to justify these massive additional costs,â€ the company said.
Farrel reported sales of $35.2 million through the first nine months of 2003. Company officials said they expect the common stock to continue trading through the Pink Sheets, an electronic quotation service for the over-the-counter securities. However, there is no guarantee that brokers will continue to make a market for the stock, the company said.
The deregistration becomes effective 90 days after the filing, although the filing results in an immediate suspension of the company's requirements to file quarterly, annual and 8-K reports. The company said it intends to provide shareholders with periodic financial information and will issue news releases announcing material events.
Farrel also will continue to hold an annual meeting.