The Board of Directors of Ericsson has authorized a change in the ratio of its American Depositary Shares (ADSs) as they relate to its Class B-shares. The change is expected to become effective as of October 23, 2002.
One ADS at the new ratio will be issued in exchange for every ten currently outstanding. Following this exchange, one new ADS will represent 10 Class B-shares. This will result in a technical price adjustment to the ADSs corresponding to the ratio change. The current ratio is 1:1.
Ericsson's Board has authorized this change in order to comply with the listing requirements of the Nasdaq National Market. ADS holders will not be charged a fee for this transaction.
After the change, the ADSs will temporarily trade under the interim symbol of "ERICD" for a period of 20 days to assist in making investors aware of the ratio change. Thereafter, the symbol will revert to the original "ERICY" trading symbol.
The ratio change will reduce the number of outstanding ADSs from approximately 1.7 billion to approximately 170 million. Citibank, N.A., as depositary, will notify existing ADS holders as to how to exchange their share certificates. ADS holders will be compensated at a rate to be determined for holdings not amounting to ten or not divisible by ten.