Press Release: Sol Melia
April 9, 2002
The issue of Sol Meliá Finance Ltd. is for an amount of 150 million euros and may be increased to 300 million
euros. It is mainly aimed at individual investors in the Spanish market.
The issue will not modify the present number of ordinary shares in the Company
Shares may be acquired in any banking entity and are not subject to charges or commissions if purchased in one
of the underwriting entities
Sol Meliá, Spain’s largest multinational hotel company, will begin today, 4th April, the initial period
of subscription, through its subsidiary Sol Meliá Finance, of a preferred share issue of 150 million euros,
an amount which may be increased to 300 million euros if required, as published in the Informative Prospectus approved
today by the Spanish Stock Exchange Commission (CNMV).
According to Sol Meliá’s Vice-Chairman, Sebastián Escarrer, “we firmly believe that the preferred
shares offered by Sol Meliá represent a good investment for savers, as they guarantee an excellent profit,
receiving interest every quarter. This issue will enable the Company to strengthen its financial structure and,
at the same time, diversify its traditional sources of financing.”
The issue is mainly aimed at individual investors and subscription orders will be taken for a minimum of 10 shares
at 100 euros each, equivalent to a total of 1000 euros. The values are expected to be negotiated in the Spanish
securities market (AIAF). Should the shares be oversubscribed, the preferred shares will be assigned on a prorrata
basis, although subscribers will be allowed a minimum of 30 shares, if, in this way, all petitions could be attended.
Furthermore, it has been decided that if the oversubscription should reach a stage where it is double the amount
of shares offered, the period of subscription may be closed earlier than anticipated.
The preferred shares will pay out a fixed annual dividend equivalent to an annual rate of 8.03% over the first
ten years, payable at the end of each quarter. The first dividend of 1,43 euros per share will be paid on the 30th
June 2002, in accordance with the number of days which have elapsed between the beginning of the operation and
that date.
After the tenth year, the issuer will have the right to amortize the issue. If this is not effected, from that
date onwards the dividend will be variable, equivalent to Euribor at three months, plus a differential of 5%, with
a minimum of 12,30% annually.
Sol Meliá’s Guarantee
The payment of the dividend of the preferred shares is guaranteed by Sol Meliá and taken from the distributable
profit, which is understood to be the consolidated net profit, plus the freely disposable reserves which, in Sol
Meliá’s case, totaled more than 500 million euros on the 31st December 2001. During the lifetime of the
preferred shares, Sol Meliá’s distributable profit cannot be less than the amount of 150 million euros,
at the end of each fiscal period.
The subscription will not be subject to charges and commissions if carried out at any banking entity underwriting
the issues. The underwriting syndicate comprises Ahorro Corporación Financiera (in representation of the
majority of Savings Banks), BBVA, Bankinter, Bankpyme, Caja Madrid, Banco Urquijo, Natexis and ABN Amro. Furthermore,
BBVA will act as entity for co-ordination, deposit and payment and as representative for the Issuer to all the
relevant organisations in the Spanish markets.
This issue is the first of its kind to be effected by the hotel company and, due to the fact that it has similar
characteristics to the Shareholder’s Equity, will considerably strengthen the financial structure of Sol Meliá,
amortize existing debt and thus prolong the average term of the same. The issue of preferred shares will not modify
the present number of the Company’s ordinary shares.
Liquidity
Sol Meliá Finance has signed a contract with the banking syndicate, by which the said entities agree to
offer up to 5% liquidity to the holders of preferred shares through the Spanish securities market (AIAF).
The preferred shares are a financial product which has been used by all of Spain’s principal financial institutions,
as well as by many international hotel companies including Host Marriot, Hilton Hotels Corporation and FelCor Lodging
Trust.
Summary of the Issue
Issuer: Sol Meliá Finance
Guarantor: Sol Meliá, S.A.
Amount of issue: 150 Million € rising to 300 Million €
Beginning of Subscription period: 04/04/02
End of Subscription period: 24/04/02
Amortization: Perpetual. Power of the issuer to amortize at the end of 10 years
Type of Interest:
8,03% during the first 10 years
Euribor 3 months plus 5% after 10 years (minimum 12,3% guaranteed)
Payment of Interest: Subject to the existence of profits, at the end of each quarter (31st March, 30th June,
30th September and 31st December)
Minimum amount of subscription: 1.000 €
Maximum amount of Subscription: Unlimited
Quotation and Liquidity: Spanish securities market (AIAF)
Aim of Operation: To strengthen the financial structure and cancel debt
Accounting of preferred shares: They will be accounted for in a similar way to Shareholders’ Equity and
will not modify the present number of ordinary shares in Sol Meliá
Where to acquire preferred shares: In any banking entity. Not subject to charges or commissions if purchased
at any of the underwriting entities.
Sol Meliá is the leading hotel company in Spain, Latin America and the Caribbean, the third largest in Europe,
tenth in the worldwide ranking and the largest resort hotel company in the world. The company currently provides
more than 350 hotels in 30 countries through its Meliá Hotels, TRYP Hotels, Sol Hotels and Paradisus Resorts
brands.
For further information: prensa@solmelia.com and www.solmelia.com.
SOURCE: Sol Melia