TIDMBNC
RNS Number : 9658B
Banco Santander S.A.
12 January 2015
RELEVANT FACT
Banco Santander, S.A. discloses information in connection with
the flexible remuneration program "Santander Dividendo Elección"
(scrip dividend scheme) to be applied to the third 2014 interim
dividend. An informative document is enclosed for purposes of
article 26.1.e) of Royal Decree 1310/2005, of 4 November
(implementing Directive 2003/71/EC on the prospectus to be
published when securities are offered to the public or admitted to
trading).
Boadilla del Monte (Madrid), January 12, 2015
INFORMATIVE DOCUMENT
CAPITAL INCREASE CHARGED TO RESERVES
BANCO SANTANDER, S.A.
January 12, 2015
THIS DOCUMENT HAS BEEN PREPARED IN ACCORDANCE WITH ARTICLE
26.1.E) OF ROYAL DECREE 1310/2005.
1. OBJECT
The ordinary general shareholders' meeting of Banco Santander,
S.A. ("Banco Santander", "Santander" or the "Bank") held on March
28, 2014 resolved, under item ten D of its agenda, to increase the
share capital of Banco Santander, with full charge to reserves, in
an amount to be determined in accordance with the terms and
conditions set out in the resolution (the "Increase"), delegating
the execution of the Increase to the board of directors, with
authority to delegate in turn to the executive committee, pursuant
to article 297.1.a) of Royal Legislative Decree 1/2010, of 2 July,
by means of which the consolidated Spanish Capital Corporations Law
was passed ("Spanish Capital Corporations Law").
The executive committee of the Bank, in the meeting held on
January 12, 2015, has resolved to execute the Increase in
accordance with the terms and conditions set out by the ordinary
general shareholders' meeting, and has fixed the overall market
value of the Increase (Amount of the Alternative Option) in 2,100
million Euro, pursuant to that resolution of the general
shareholders' meeting.
In accordance with article 26.1.e) of Royal Decree 1310/2005, of
4 November (implementing Directive 2003/71/EC on the prospectus to
be published when securities are offered to the public or admitted
to trading), the preparation and publication of a prospectus
related to the admission to listing of the shares issued as a
consequence of the execution of the Increase will not be necessary
"provided that a document is made available containing information
on the number and nature of the shares and the reasons for and
details of the offer". This informative document provides such
information. This document is available at the Bank's website
(www.santander.com) and at the CNMV's website (www.cnmv.es)
2. PURPOSE OF THE INCREASE: "SANTANDER DIVIDENDO ELECCIÓN" PROGRAM
The Increase serves as an instrument for the
shareholder-remuneration program named "Santander Dividendo
Elección" which shall be applied to the third 2014 interim dividend
in January / February 2015. This program was implemented by the
Bank for the first time in 2009 and has been applied since then
with wide acceptance by shareholders. The program allows
shareholders to opt between receiving newly issued Santander shares
or an amount in cash broadly equivalent to the third interim
dividend of 2014. The "Santander Dividendo Elección" program is
similar to other programs implemented in the past by other
international banks and follows the suggestions made by the
shareholders of Banco Santander. With it, Santander's shareholders
benefit from more flexibility, since they will be able to adapt
their remuneration to their preferences and personal situation,
also benefiting from a more favourable tax treatment in case they
opt to receive new shares.
"Santander Dividendo Elección" program works as follows. Each
shareholder will receive a free allotment right for every Santander
share held. These rights will be listed on and may be traded on the
Spanish Stock Exchanges during a 15 calendar day period. Following
the end of this period, the rights will be automatically converted
into new Santander shares. Each shareholder may opt for one of the
following alternatives:
(i) Receive new Santander shares. In this case, the shareholder
will receive free of charge the number of shares corresponding to
the number of rights held. The delivery of shares will not be
subject to Spanish withholding tax.
(ii) Receive a cash payment broadly equivalent to the
traditional third interim dividend. To this end, Banco Santander
has assumed an irrevocable undertaking to acquire the free
allotment rights for a fixed price. This option will be offered
only to shareholders of record as of the date when the free
allotment rights are granted (envisaged for January, 13 2015, as
set out in the calendar shown in Section 3.4 below), including the
qualified investors that acquired Banco Santander shares within the
capital increase announced on January, 8, and only with regard to
the allotment rights granted on January, 13. Consequently, the free
allotment rights acquired on market may not be tendered in Banco
Santander's offer. This option will be subject to the same tax
treatment as a dividend distribution and, therefore, the amount to
be paid to the shareholders will be subject to a 20% Spanish
withholding tax deduction.
(iii) Receive a cash payment through selling rights on market.
Given that the rights will be listed, the shareholders may sell
them on market at any time during the trading period described in
section 3.5 below at the prevailing market price rather than at the
guaranteed price offered by Banco Santander. The proceeds for the
on market sale will not be subject to Spanish withholding tax.
Additionally, shareholders will be able to combine the above
mentioned alternatives in view of their specific needs.
Shareholders who do not make an election will receive new shares
unless they have previously given (in previous programs) permanent
instructions as described in section 3.5 below.
3. DETAILS OF THE OFFER
3.1. Number of rights needed and number of shares to be issued
Pursuant to the formulae set forth in section 2 of the general
shareholders' meeting resolution, the executive committee has set
the following details of the Increase:
(i) The number of free allotment rights needed to receive a new
share is 44. The shareholders of Banco Santander who appear as such
in the book-entry registries of Iberclear at 23:59 on the day of
publication of the announcement of the Increase in the Official
Bulletin of the Commercial Registry ("Boletín Oficial del Registro
Mercantil") (envisaged for January 13, 2015) will be allotted a
free allotment right for each share of Santander held. Therefore,
the aforementioned shareholders will have the right to receive a
new share for each 44 old shares held on the mentioned date.
Such number of rights has been calculated as follows,
considering that the number of outstanding shares of the Bank is
13,798,006,893, that the Amount of the Alternative Option is
2,100,000,000 Euros, as indicated above, and that the average
market price of the Santander share in the term set out in the
capital increase resolution (PreCot) is 6.589 Euros:
Num. rights = NTAcc / (Amount Alternative Option / PreCot) =
13,798,006,893 / (2,100,000,000/ 6.589) = 43.29288924666 = 44
rights (rounded up to the nearest whole number).
(ii) The number of shares to be issued is 313,591,065.
Nevertheless, the actual number of shares which shall be finally
issued may be lower, as it will depend on the number of rights
acquired by Banco Santander under its undertaking to purchase free
allotment rights. Banco Santander will waive the free allotment
rights it acquires by virtue of such undertaking. Therefore, only
the shares corresponding to the free allotment rights not acquired
by Banco Santander will be issued. This number results from the
following formula:
NAN = NTAcc / Num. rights = 13,798,006,893 / 44 = 313,591,065
new shares (rounded down to the nearest whole number).
In order to ensure that the number of free allotment rights
needed to receive a new share and the number of shares to be issued
are whole numbers and not fractions, Pereda Gestión, S.A., a
subsidiary of Banco Santander, has waived 33 free allotment rights,
corresponding to 33 shares of Banco Santander held by it.
3.2. Amount of the Increase and reserve against which it will be charged
In view of the number of shares to be issued set out above, the
maximum amount of the Increase is 156,795,532.50 Euros. The amount
by which the Bank's capital will actually be increased is dependant
upon the number of shares finally issued.
The amount of the Increase will be charged against the share
premium reserves, which amounted to 36,804 million Euros as of
December 31, 2013.
3.3. Price of the undertaking to purchase rights
The gross price at which Banco Santander undertakes to purchase
rights is 0.146 Euros per right, calculated pursuant to the formula
set forth in the Increase resolution as follows:
Price of the undertaking to acquire the free allotment rights =
PreCot / (Num. of rights + 1) = 6.589 / (44 + 1) = 0.146422 = 0.146
(rounded up or down to the nearest Euro thousandth and, in case of
a half Euro thousandth, rounded up to the nearest Euro
thousandth).
As a result, those shareholders willing to receive their
remuneration in cash, will be able to sell their free allotment
rights to Banco Santander at a fixed gross price of 0.146
Euros.
3.4. Calendar
The envisaged calendar for the execution of the Increase is the
following:
(i) January 13, 2015. Publication of the announcement of the
Increase in the Official Bulletin of the Commercial Registry
("BORME"). Record date for the allotment of rights (23:59 h.
CET).
(ii) January 14, 2015. Beginning of the trading period of the
rights. Santander share quotes "ex-coupon".
(iii) January 23, 2015. Last date to request remuneration in
cash (sale of rights to Banco Santander).
(iv) January 28, 2015. End of the trading period of the rights.
Acquisition of free allotment rights by Banco Santander from those
shareholders who have requested cash broadly equivalent to the
traditional third interim dividend.
(v) January 29, 2015. Banco Santander waives the rights so acquired. Closing of the Increase.
(vi) January 30 - February 5, 2015. Actions for the registration
of the Increase and admission to listing of the new shares on the
Spanish Stock Exchanges.
(vii) February 2, 2015. Cash payments to those shareholders who have so requested.
(viii) February 6, 2015. Beginning of ordinary trading of new
shares on the Spanish Stock Exchanges[1].
3.5. Allotment of rights and procedure to opt for cash or new shares
The free allotment rights will be allotted to the shareholders
of Banco Santander who appear as such in the book-entry registries
of Iberclear at 23:59 on the day of publication of the announcement
of the Increase in the Official Bulletin of the Commercial Registry
("Boletín Oficial del Registro Mercantil") (envisaged for January
13, 2015). The trading period of the rights will begin on the next
business day and will have a term of fifteen calendar days (from
January 14 to January 28, 2015).
During the trading period of the rights, the shareholders may
opt for cash or new shares as explained above, as well as for
acquiring on market free allotment rights to subscribe for new
shares. However, those shareholders who wish to accept the
undertaking to purchase rights offered by Banco Santander and
receive cash at the guaranteed price shall need to communicate
their decision no later than January 23, 2015. The undertaking to
purchase rights is addressed only at the rights alloted free of
charge to shareholders, and not to those acquired on market. To
choose among the alternatives offered by the "Santander Dividendo
Elección" program, shareholders will have to contact the entities
where their Santander shares and corresponding free allotment
rights are deposited. Specifically:
(i) Shareholders whose shares are deposited at Grupo Santander.
These shareholders may opt to receive, in the current program,
their remuneration in cash at the guaranteed fixed price offered by
Banco Santander from time to time. To this end, they will have to
contact their usual branch and give the relevant order.
Shareholders who opted in any previous "Santander Dividendo
Elección" program to receive cash in subsequent programs at the
guaranteed price will receive their remuneration in cash and no
communication shall be required. In the absence of an express
communication, shareholders who have not opted in previous programs
to receive cash permanently will receive new shares. Grupo
Santander shall not charge any fees or costs to those shareholders
who opt to receive cash at the guaranteed fixed price or to receive
new shares. In case of sale of the rights on market, Grupo
Santander shall charge the usual fees or costs pursuant to the
applicable regulations.
(ii) Shareholders whose shares are deposited with other
entities. These shareholders will have to contact the entity where
their shares are deposited to make their decision. Specifically, if
they want to receive cash at the fixed purchase price of Banco
Santander's undertaking, they shall make their option no later than
January 23, 2015. In the absence of an express communication,
shareholders will receive new Santander shares[2]. The depositary
entities may charge to shareholders fees or costs related to the
allotment of shares or to the sale of rights pursuant to the
applicable regulations.
The Increase is carried out free of fees and costs for
shareholders in connection with the allotment of the new shares,
with Banco Santander assuming the costs for the issue,
subscription, placing on market, listing and other related
costs.
4. NATURE OF THE SHARES TO BE ISSUED
4.1. Face value, issue price and representation of shares
The new shares to be issued in the Increase will be ordinary
shares with a face value of fifty Euro cents (0.5) each, of the
same class and series as those currently outstanding. The new
shares will be issued at an issue price of fifty Euro cents (0.5),
that is, without issuance premium, and will be represented in
book-entry form, the records of which will be kept by Sociedad de
Gestión de los Sistemas de Registro, Compensación y Liquidación de
Valores, S.A.U. (Iberclear) and its participant entities.
4.2. Reserves to which the shares will be charged and balance sheet used for the Increase
The Increase is free of charge and, therefore, does not require
any payment from the shareholders. As stated above, the Increase
will be charged against the share premium reserves, which amounted
to 36,804 million Euros as of December 31, 2013.
The balance sheet used for purposes of the Increase is that
corresponding to December 31, 2013, duly audited by Deloitte, S.L.
on February 21, 2014 and approved by the ordinary general
shareholders' meeting on March 28, 2014 under item one A of its
agenda.
4.3. Shares in deposit
Following the end of the trading period of the free allotment
rights, the new shares that have not been capable of being allotted
due to causes not attributable to Banco Santander will be kept in
deposit and available to those who evidence lawful ownership of the
relevant free allotment rights. Three years after the end of the
free allotment rights trading period, the shares still pending to
be allotted may be sold at the risk and expense of the interested
parties in accordance with article 117 of the Spanish Capital
Corporations Law. The net proceeds of the sale will be deposited in
the Bank of Spain or in the General Deposit Bank (Caja General de
Depósitos) at the disposal of the interested parties.
4.4. Rights of the new shares
The new shares will confer the same voting and economic rights
upon their holders as the currently outstanding ordinary shares of
Banco Santander from the date on which the capital increase is
declared to be subscribed and paid up, which is envisaged to happen
on January 29, 2015.
4.5. Admission to listing
The Bank will apply for the listing of the new shares on the
Madrid, Barcelona, Bilbao and Valencia Stock Exchanges through the
Spanish Automated Quotation System (Mercado Continuo), and shall
take the steps and actions that may be necessary with the competent
bodies of the foreign Stock Exchanges on which Banco Santander
shares are traded (currently Lisbon, London, Milan, Warsaw, Buenos
Aires, Mexico, New York -through ADSs (American Depositary Shares-
and São Paulo, through BDRs -Brazilian Depositary Receipts-) in
order for the new shares issued under the Increase to be admitted
to trading. Subject to the granting of the relevant authorizations,
it is expected that the ordinary trading of the new shares in the
Spanish Stock Exchanges will begin on February 6, 2015.
5. TAX REGIME
Below there is a brief description of the tax regime currently
applicable in Spain to the options available for shareholders. This
description does not constitute tax advice and does not include all
tax considerations that may be relevant for each shareholder in
view of his particular circumstances. Therefore, shareholders are
advised to consult with their tax advisors the tax regime
applicable to them.
The delivery of the shares issued in the Increase will be
considered for tax purposes as a delivery of fully paid-up
free-of-charge shares, and therefore, shall not be considered
income for purposes of Personal Income Tax (Impuesto sobre la Renta
de las Personas Físicas) ("IRPF"), Corporate Income Tax (Impuesto
sobre Sociedades) ("IS"), or Non-Resident Income Tax (Impuesto
sobre la Renta de no Residentes) ("IRNR"), whether or not the
shareholders act through a permanent establishment in Spain.
The acquisition value, both of the new shares received in the
Increase and of the shares from which they arise, will be the
result of dividing the total cost by the applicable number of
shares, both old and new. The acquisition date of the new shares
will be that of the shares from which they arise.
If the shareholders sell their free allotment rights on the
market, the amount so obtained will be taxed as follows:
(i) For purposes of the IRPF and the IRNR without permanent
establishment, the amount obtained in the sale of the free
allotment rights on the market follows the same rules as those
applying to pre-emptive rights. Consequently, the amount obtained
in the transfer of the free allotment rights on the market reduces
the acquisition value for tax purposes of the shares giving rise to
such rights, by application of Section 37.1.a) of Act 35/2006, of
28 November, on Personal Income Tax.
In this way, if the amount obtained in such transfer is higher
than the acquisition value of the securities from which the rights
arise, the excess amount will be treated as a capital gain for the
seller in tax period in which the transfer takes place.
In the case of shareholders who are individuals and residents of
the Historical Territories of the Basque Country, the amount
obtained for the transfer of the free-of-charge allocation rights
is regarded as a financial profit.
(ii) Taxation under the IS and the IRNR with permanent
establishment in Spain, to the extent that a full business cycle
has been completed, will be determined in accordance with the
relevant accounting rules.
In the event that the holders of the free allotment rights
accept the Bank's undertaking to acquire the free allotment rights
for a fixed price, the tax regime applicable to the amount obtained
in the transfer to the Bank of the free allotment rights held in
their capacity as shareholders will be that applicable to cash
dividends and, therefore, shall be subject to withholding.
6. FOREIGN JURISDICTIONS WHERE BANCO SANTANDER IS LISTED
The options, terms and procedures indicated in this informative
document may not be the same as those applicable to the
shareholders owning Santander shares on the different foreign stock
exchanges where the Bank is listed. These shareholders are urged to
consult the public announcements made and other documents published
in their jurisdictions.
* * *
Banco Santander, S.A.
_______________________________
Ignacio Benjumea Cabeza de Vaca
Secretary General
[1] Subject to the granting of the relevant authorizations. The
admission to trading of the new shares on the foreign Stock
Exchanges on which the shares of the Bank are traded shall also be
requested.
[2] Special arrangements may exist for those shareholders who
hold their shares through the UK nominees and in the form of ADRs -
please note section 6.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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