25th Jun 2007 09:10
Banco Santander Central Hispano SA25 June 2007 --------------------------------------------------------------------------------Press Release-------------------------------------------------------------------------------- Extraordinary Shareholders' Meeting on July 27th to approve the financing of ABN's asset acquisition - Share capital will increase by EUR 4 billion, with preemptive rights for Santander shareholders. - The Bank will issue convertible bonds amounting to EUR 5 billion. Madrid, June 25th, 2007 - The Board of Directors of Banco Santander has resolvedto call an Extraordinary Shareholders' Meeting on July 26th and 27th, on firstand second call, respectively, which is expected to be held on the second one ofthe days mentioned. The goal of the Meeting is to approve the issuance ofcapital instruments that will be used in the partial financing of the ABN Amroacquisition, within the offer proposal jointly presented by Royal Bank ofScotland, Fortis and Santander on May 29th. The Board of Directors estimatesthat Banco Santander's contributions to ABN Amro's acquisition, under the termsof the proposed offer, will not exceed EUR 19.855 billion. This amount willbasically be used in the acquisition of Banco Real in Brazil, Antonveneta inItaly and Interbank in The Netherlands. Thus, the Shareholders' Meeting will resolve on an authorised capital agreementunder which the Board of Directors is expected to issue shares amounting to EUR4 billion, including nominal value and issuance premium, and a further agreementon the issuance of mandatory convertible bonds for an additional EUR 5 billion. The remaining investment will be financed through balance sheet optimisationprocedures, including an increase in the capital leverage of the resultingcompany, acceleration of securitisation plans and asset disposal. With this combination of financial sources, the Board of Directors expects toreach a "core Tier 1" ratio of 5.3% upon completion of ABN Amro's SantanderBusinesses and bring this ratios to current levels (approximately 6%) in areasonable period of time. The final amount and the timing of the mentioned contributions will depend onthe final conditions of the bid. Expected proceedings (• billion) (%)New issuance (1)Share issuance 4 20.10%Mandatory convertible bond issuance 5 25.13%Total new issuance 9 45.23%Balance sheet optimisation through debt,securitisations and asset sales 10.9 54.77% Total 19.9 100% (1) Estimation of proceedings from expected new issuance under the bid's currentcircumstances, subject to, among others, the final amount of proceedings fromthe remining financing procedures of ABN Amro's acquisition transaction.... Share issuance The Shareholders' Meeting will resolve granting the Board of Directors the powerto increase the share capital once or several times and at any time during threeyears starting from the day of the Shareholders' Meeting in a nominal amount ofup to EUR 1,563,574,144.5, through the issuance of new shares -with or withoutpremium and with or without voting rights. Nevertheless, for the financing ofcertain ABN Amro assets, under the terms of the proposed offer, the Board ofDirector intends to increase share capital by approximately EUR 4 billion,including capital and issuance premium, and without excluding Banco Santander'sshareholders' preemptive right. Convertible bonds The issuance will amount to EUR 5 billion with a maximum expiration of fiveyears and an interest rate to be set by the Board at the time of the issuance.The bonds' rate will not be below the nominal value or the share's equity value,set by the auditors at EUR 7.12 per share. At expiration, bonds will bemandatorily converted into new Banco Santander ordinary shares. The agreementwill be executed in the date or dates set by the Board of Directors within aperiod of one year starting from the approval. If it is not carried out withinthis period, it will lack any value or effect. Convertible bonds will be subscribed by a Banco Santander subsidiary usingproceedings from a preference share issuance allocated in the market. Preferenceshares will be exchangeable for convertible bonds. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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