Fiat will proceed with the conversion of its savings class of shares into ordinary shares, the automaker disclosed. This initiative will simplify the capital structure of Fiat, making it easier to purchase the 41.5% of Chrysler it doesn't already own. The conversion was announced in October. It removes a shareholder class which has a blocking vote on decisions like takeover bids and mergers.
Fiat revealed that on Monday, the holders of the savings shares have agreed to the plan with an approved conversion ratio of 0.85 ordinary shares per preference share. Savings shares give a greater dividend compared to ordinary shares. The conversion will be subject to approval at the annual shareholder's meeting of Fiat to be held on April 4.
Since a 2009 bailout deal with the U.S. government, Fiat has been managing Chrysler. Currently, it owns 58.5% in the third largest U.S. automaker. The U.S. union trust fund VEBA has the remaining 41.5%. VEBA is seeking to cash in on its holding. Chrysler and Fiat CEO Sergio Marchionne had previously stated that Fiat would not commence discussions with VEBA regarding purchasing its share until the second half of this year.