SWEDEN - Fourteen Swedish institutions, all shareholders in Telfonaktiebolaget LM Ericsson (Ericsson), have purchased so-called "conversion rights" in the company for SEK40m giving them the opportunity to increase their voting power.
The pension funds and companies, which include the first four Swedish buffer funds – Första AP-fonden, Andra AP-fonden, Tredje AP-fonden and Fjärde AP-fonden – have acquired 36,363,982 conversion rights for SEK1.1 each, the group said in a statement.
The deal entitles them to convert those shares from “B” shares, worth only one tenth of the voting power of an “A” share, into corresponding“A” shares.
Ericsson’s listings on the Swedish exchange are of its “B” shares (or ADR equivalent), which were previously worth only one thousandth the voting power of an “A” share. This meant that while foreign shareholders owned 55% of the capital, they were entitled to less than 2% of the votes.
The voting power has since been changed to give “B” shares one-tenth the value of “A” shares.
A spokesperson for Nordea’s funds in Sweden and Luxembourg, said the conversion rights purchase deal was an integral part of the proposal to reduce the difference in voting rights from 1:1000 to 1:10.
“The offer gave a possibility for the holders of conversion rights to sell the rights for SEK1.10 in cash per conversion right,”he said.
An Ericsson spokesperson said “A” shareholders were given the chance to convert some of their “B” shares into “A” shares as a form of compensation for foregoing some of their voting power.
Among those institutions to acquire conversion rights were Robur funds, SEB and SPP, Nordea’s funds in Sweden and Luxembourg, Handelsbanken Fonder and Alecta Pensionsförsäkring, ömsesidigt.
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