OREANDA-NEWS. Peabody Energy shareholders have approved a reverse stock split as part of the company's efforts to stay in compliance with exchange listing requirements.

The largest US coal producer will exchange one new share for 15 shares of existing stock at the close of business on 30 September. That will shrink the number of shares outstanding to 19mn from about 278mn effective on 1 October.

Peabody's share price has plunged by nearly 90pc over the last year as it and others coal industry members struggle with weak pricing and demand. The company called for a special shareholder meeting on 17 August, as its share price neared the $1 minimum threshold the New York Stock Exchange (NYSE) holds for compliance.

Peabody's stock rebounded slightly at the end of last month but has since declined again, ending yesterday at $1.44/share. The NYSE typically warns a company of delisting when its share price has held below $1 for 30 days.

So far this year, Walter Energy and Alpha Natural Resources have been delisted from the exchange for failing to maintain the $1/share threshold. Arch Coal executed a reverse one-for-10 stock split in August to avoid the same fate.

Peabody had asked shareholders to consider five reverse stock-split ratios ranging from one-for-eight to one-for-20.