Telecom Italia proposes to convert saving shares

MILAN (Reuters) - Telecom Italia said on Thursday it had decided to go ahead with a conversion of the phone group's 6 billion saving shares into ordinary stock and will put the proposal to a shareholder vote at meetings in December.

In a statement, Italy's biggest phone group said it would give one ordinary share in exchange for each saving share and 9.5 euro cents payment in cash. Stock not tendered in voluntarily would be converted under a mandatory scheme at a ratio of 0.87 ordinary shares for each saving one.

Saving shareholders will not be entitled to a dividend on 2015 earnings given that the conversion is expected to take effect before such payment would be done.

Holders of ordinary shares will vote on the matter on Dec. 15 and those owning saving shares on Dec. 17.

A stock conversion should help heavily indebted Telecom Italia generate cash as saving shares do not have voting rights but are expensive for companies because their holders are entitled to a dividend.

(Reporting by Agnieszka Flak; Editing by Francesca Landini and David Holmes)