WPP’s $1-Billion Debt Restructuring OKd : Advertising: Stockholders give the British-based firm a new lease on life.

WPP Group, one of the world’s biggest advertising companies, won a new lease on life Wednesday when stockholders voted for a $1-billion debt restructuring.

The fate of the British-based company, which owns such agencies as Ogilvy & Mather and J. Walter Thompson, had hung in the balance until the last minute, with the risk that one major stockholder could ruin the deal.

Stockholders of common and preferred shares voted overwhelmingly at an extraordinary meeting in London to adopt a plan to issue new shares to WPP’s banks and to convert preferred shares into common ones.

“The management can now concentrate on running the businesses instead of just keeping the whole thing afloat--and that will make a lot of difference,” said Richard Sanderson, analyst at Panmure Gordon, a brokerage house.

The company, formerly a manufacturer of shopping carts--WPP stands for Wire & Plastic Products--was built up in the 1980s by Chief Executive Martin Sorrell, who pursued an aggressive acquisition plan.

He bought Madison Avenue stalwarts Ogilvy & Mather and J. Walter Thompson on borrowed money, then found it hard to pay the debt as advertising revenue fell during the recession.

Last Friday, Fidelity Investments, a U.S-based fund manager with 10% of WPP preferred stock, withdrew its opposition to the plan after it realized that it could not muster enough support from other institutions to block the deal.

Fidelity had, until its abrupt change of mind, reserved the right to vote against the deal. It said the plan favored WPP’s bankers over stockholders.

The restructuring needed 75% stockholder approval.

The bank coordinating committee granted one concession to Fidelity--that preferred stockholders would get representation on the WPP board.

The future of the company appeared more secure after the adoption of the restructuring plan, analysts said.

“It will mean a lot more confidence for the people who work in the operating company, who must have been very worried about the situation over the last year or so,” said Panmure Gordon’s Sanderson.

The advertising industry is described as a “people business” where its assets are the staff who create and sell the all-important image to clients.

WPP director Jeremy Bullmore, who chaired the meeting, described the recapitalization as fair to both classes of stockholders and the only way to secure the company’s future.

A vote against it would have led to the possible collapse of the company with stockholders getting little or nothing back.

By Monday, proxies from stockholders of common and preferred shares were more than 99% in favor.

But as one WPP executive said, it was always possible for proxy holders to change their minds on the day of the meeting and vote against.

There had been an outside chance the deal could have been torpedoed by dissenting preferred stockholders.