Morgan Stanley activated its option to purchase the Class A common shares in Agere, the microelectronics unit that was partially demerged last week.
Morgan Stanley will exchange $519 million of Lucent’s commercial paper for the shares, which will delete the debt.
Lucent has been repaying its short-term debt, held by Morgan Stanley, the underwriters of the Agere initial public offering. That debt has now been reduced to $840 million early last week from $2.3 billion in February.
Due to the application of the option, 90 million Class B shares held by Lucent will be converted to Class A common stock, leaving a total of 690 million shares of Agere Class A common stock and 945.1 million shares of Class B common stock outstanding. The remaining Class B bonds will be wholly owned by Lucent, representing about 58% of the total outstanding common stock.
