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By Tatiana Bautzer
SAO PAULO, July 23 (Reuters) - Via Varejo, the appliance retailing arm of Brazilian retailer GPA SA, will convert all its shares into a single class of common stock, the company said in a securities filing on Monday.
The co-vice chairman of GPA, Ronaldo Iabrudi, said in a phone interview late on Monday that all preferred shares would be converted into common shares using a 1:1 ratio. Owners of units, a bundle of two preferred and one common share that is Via Varejo's most widely traded stock class, would receive three common shares, Iabrudi added.
GPA SA, which is controlled by France's Casino Guichard Perrachon SA, has been trying to sell its appliance retailing unit for more than a year.
A deep downturn in Brazil's economy has weighed on the sale process.
After the share conversion, GPA, which now holds 62.5 percent of Via Varejo's voting stock, will have a 43.3 percent stake in the company, according to Iabrudi.
Via Varejo was classified as an asset for potential divestment when GPA announced its intention to sell the controlling stake.
After the stock conversion, Via Varejo will be listed in Novo Mercado, a segment in Brazil's stock exchange with strengthened governance standards.
Iabrudi pointed to other companies that did similar reorganizations, such as miner Vale SA, saying he expected Via Varejo's shares to gain liquidity.
By mid-August, Via Varejo will schedule a shareholders meeting within 30 days to approve the share conversion. The co-vice chairman said the second largest shareholder in Via Varejo after GPA, the Klein family, which holds a 25 percent stake, was also supporting the conversion to a single class of stock. GPA will not change the members of Via Varejo's board, he added.
The transaction will not affect the sale process of the appliance and electronics unit, Iabrudi said. "It's natural that potential buyers are cautious about acquiring such a big asset, during an electoral period with a lot of uncertainty," he added, declining to elaborate on a time frame for a deal. (Reporting by Tatiana Bautzer and Aluisio Alves; Editing by Sandra Maler and Peter Cooney)