Ericsson voting reform to aid capital plan

Ericsson has announced that a long-awaited reform of its controversial voting structure cuts the difference in voting rights between the Swedish company's A and B shares from 1,000-to-one to 10-to-one.

The move is expected to end an awkward arrangement that has annoyed foreign shareholders and management at the world's largest operator of mobile telecommunications networks.

Many Nordic companies have A shares, with 10 times the votes of B shares.

Ericsson's two main power blocs - based around the Wallenberg family and Svenska Handelsbanken - will retain control over the company.

They currently control 80% of the votes, with less than 10% of the capital, and would still have about 40% of the votes after the overhaul.

In turn, Swedish institutions and foreign shareholders will wield greater influence, with the combined voting power of foreign shareholders rising from 2% to about 20%.

Ericsson management is likely to welcome the reform, which should make it easier to raise capital, and will present an outline of the plan to Ericsson's annual meeting on April 6 this year.