This will occur through an increase in the number of shares traded in circulation and the consequent adjustment of their price.
At an extraordinary general meeting to be held on March 13, Telefónica Brasil will propose a stock split plan to double the number of shares in circulation. The company is seeking to increase the liquidity of its shares and improve the price formation process.
The latter will occur through an increase in the number of shares traded in circulation and the consequent adjustment of their price, according to the documentation published by the Brazilian subsidiary of Telefónica consulted by Europa Press .
With this initiative, the operator also seeks to reduce operating and administrative costs arising from the current configuration of its shareholder base, provide greater efficiency in its management and optimize the distribution of profits among shareholders, among other issues.
The volume of Telefónica Brasil shares currently outstanding amounts to 1,630,643,696 and, once the split is completed, that amount will double to 3,261,287,392 shares.
In this regard, the company has explained that the split will apply to all shareholders and will not alter the value of the telecom's share capital.
PROCEDURE
If the shareholders approve the split at the meeting on March 13, the operation will be carried out in two steps, the first of which will be a grouping of the current volume of shares in circulation with a ratio of 40 to 1, meaning that every 40 shares will be represented by just one. In this way, the number of shares will be reduced to 40,766,092.4.
Once the initial grouping is completed, the 40,766,092.4 shares will be converted in a ratio of 1 to 80, that is, each share will be multiplied by 80, so that the outstanding capital of Telefónica Brasil will now consist of a total volume of 3,261,287,392 shares (double the current amount).
In this sense, shareholders whose participation in Telefónica Brasil is not made up of a number of shares that is a multiple of 40 (for example, someone who owns 90 shares) will generate fractions of shares in the first part of the process (someone with 90 shares will have 2.25 shares in the grouping phase).
According to Telefónica, these fractions of shares will be grouped in whole numbers and put up for sale on the São Paulo Stock Exchange, so that the net proceeds obtained will be prorated and distributed proportionally among all holders of fractions of shares.
However, if the measure is finally approved, the company will give a period of no less than 30 days for shareholders to reconfigure their share package to have a number of shares that is a multiple of 40.
If successful, the transaction will be carried out within six months from the extraordinary general meeting on 13 March.
