Spanish listed companies may now increase their capital following the technique of public offerings of securities, where the price of the securities is established at the end of the public offer period, considering, among other things, the demand generated. Since January 1999, upon agreeing to an increase in capital excluding the pre-emptive right, the general shareholders' meeting of a listed company is not obliged to establish the subscription price of the new shares, but is able to limit itself to establishing the procedure to determine it, so long as the price finally determined is not inferior to the net asset value.
Repsol was the first Spanish company to expand its capital using this technique. In July Repsol concluded the largest increase in capital achieved by a private company. Through the public offering of the new shares, the company optimized the different subscription prices established for the various categories of investors (retailers, employees and institutional investors), thus permitting the company to maximize its income: Repsol raised nearly euro6billion and thus was able to finance the acquisition of the Argentinean petroleum company YPF. In addition, the foregoing was achieved respecting the interests of existing shareholders by means of establishing a system of preferential allocation of shares to shareholders which permitted such shareholders to subscribe the number of shares they would have had the right to subscribe had the pre-emptive right not been excluded.
Luis de Carlos Bertran/Gonzalo Martìn de Nicolas
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