The Boards of Fiat Spa and Fiat Industrial have decided to propose to the shareholders the conversion of all preferred and savings shares into ordinary shares. This conversion "is intended to reduce the complexity of the capital structure - reads a release - and to simplify the governance of the Company through the elimination of categories of securities that have recorded prices substantially lower than those of ordinary shares and volumes of very limited negotiation”.
In particular, in the case of Fiat Spa, "the BoD believes that the conversion may benefit all shareholders and increase the liquidity of the shares" and "intends to propose a conversion ratio of 0,850 ordinary shares for each preference share and 0,875 ordinary shares for each savings share ”.
For Fiat Industrial, however, "the BoD intends to propose a conversion ratio of 0,700 ordinary shares for each preference share and 0,725 ordinary shares for each savings share".
In both cases, "the preference shares and the savings shares will retain all the economic rights valid for the 2011 financial year. The ordinary shares issued following the conversion will have entitlement from 1 January 2012. Each of the proposed conversions will take place only on condition that the disbursement to be paid by the company does not exceed a maximum of 56 million euros for preference shares and a maximum of 44 million euros for savings shares. In any case, the total disbursement for the Company as a result of exercising the right of withdrawal cannot exceed a total of 100 million euros".
The managing director of Lingotto, Sergio Marchionne, believes "that the simplification of the capital structure will bring benefits to all shareholders and meet the expectations of the financial markets".
Following these announcements, Exor, the holding company of the Agnelli group which controls the Turin company, confirmed "the will to maintain its stake in the capital of Fiat and Fiat Industrial above the takeover bid threshold, even after the conversion".
John Elkann, chairman of Exor, commented on the operation arguing that "the simplification of the respective share capitals makes it possible to achieve greater clarity and efficiency and responds to the best interests of the two companies and of all categories of relative shareholders".
