The Sol Meliá Extraordinary General Shareholders’ Meeting held in Palma de Majorca has approved the nine points contained on its agenda, amongst which was the conversion of the company’s share capital to Euros as stipulated in Spanish law.

After the acquisition of MIA (Meliá Inversiones Americanas) and the later merger with Inmotel, Sol Meliá stock capital in pesetas had reached a total of 5,718,489,000 pesetas, made up of 57,184,890 shares with a nominal value of 100 pesetas each.

The conversion now means that stock capital has been set at 34,368,811.08 Euros, consisting of 57,184,890 shares with a nominal value of 0.601012 Euros each, after application of the 166.386 pesetas to the Euro rate set by European currency authorities.

Share split:
To allow the shares’ nominal value to be divisible by three after the conversion, shareholders also approved a reduction of 57,877.08 Euros in stock capital to 34,310,934 Euros, thus leaving shares with a nominal value of 0.6 Euros.

This reduction was charged to a company voluntary reserve account as stipulated in Spanish Company Law.

There was also unanimous approval for the nominal value of company shares to be reduced from 0.6 to 0.2 Euros per share at an unspecified date in the future. This operation will not cause any reduction in company stock capital which will remain at 34,310,934 Euros.

The number of company shares will rise from 57,184,890 to 171,554,670. Shareholders that currently have one share in Sol Meliá will have three shares in the company on completion of the split.

Authorisation for capital increases and the emission of convertible bonds or debt:

The meeting also approved changes in company statutes to better adapt them to the needs of a publicly quoted company, and gave authorisation to future capital increases or the issue of debt or convertible bonds, leaving open the way or the time at which this may be done. Any capital increases would have an upper limit of 17,155,467 Euros, achieved through either one or several increases, under the conditions considered most appropriate by company management, but within a maximum period of the next five years.

The company may also issue a maximum of 235,000,000 Euros in debt or bonds convertible to newly issued Sol Meliá shares and/or existing shares whenever it may be considered appropriate by company management.

To make this easier to bring about, it was also agreed to allow an increase in capital by the amount that would be required to respond to the conversion of bonds issued by the company up to a maximum of 3,916,667 Euros through the issue of new ordinary shares. Sol Meliá management has been given a maximum period of one year to carry out any such operation. The approval of these measures is a sign of the company’s stated interest in the use of other complementary financial instruments to support its expansion programme.

The company will thus dispose of several alternatives in the future to respond most appropriately to acquisition opportunities or tourism development projects that may arise in the future and which fit in with the company’s growth strategy and profitability requirements.

Since the merger and acquisition operations, Sol Meliá has bought two important properties, Meliá White House in London and the Meliá Mexico Reforma in Mexico D.F., involving an investment of 23,300 million pesetas - more than 140 million Euros.

The company has also announced its interest in investments in other projects in major European cities, Latin America and the Caribbean.

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