The information provided herein summarizes the main features of REPSOL's Flexible Dividend Program which is again being offered to shareholders and will be developed through a capital increase in paid-up share capital (capital increase against reserves), along with Repsol’s purchase commitment of free-of-charge allocation rights at a guaranteed fixed price.
For further details of the Program, please see the resolution proposal related to point five of the Agenda approved by the Annual Shareholders Meeting held on May 31st, 2019. Such proposal, together with the report of the Board of Directors dated March 27th, 2019, contain detailed and complete information about the features and functioning of the Program as well as the powers vested in the Board with respect to its implementation.
On May 31st, 2019, the Company announced by Official Notice (register number 278768) the timetable relating to the execution of the paid up capital increase, scheduled for June and July 2019.
All these documents (resolution proposal, report of the Board of Directors and Official Notice) are available at (www.repsol.com), in the sections related to the Annual Shareholders Meeting and Repsol on the Stock Exchange (Flexible Dividend Program).
Program definition and explanatory memorandum
Description and practical application of the program
Taxation of the Flexible Dividend Program
Preliminary comments
The principal tax implications (questions 29 to 34) deriving from the REPSOL Flexible Dividend Program are set out below, based on the tax laws in place in the common territory and the interpretation made by the Spanish tax authorities (Dirección General de Tributos) in answers to several binding consultations, and on the foreseeable assumption that the acquisition by the Company of the free-of-charge allocation rights as a result of the Purchase Commitment is made with a charge to voluntary reserves from undistributed profits.
Generally, the tax policy applicable to resident shareholders of the Spanish autonomous regions—including the Chartered Community of Navarre, Ceuta, and Melilla, while it is similar to the common territory tax policy, can have some differences in its application.
Shareholders not residing in Spain, holders of American Depositary Shares representing the Company’s shares, and holders of Company stock listed on markets or stock exchanges other than the Madrid, Barcelona, Bilbao, or Valencia Stock Exchange must review with their fiscal advisors the effects resulting from the various capital increase options, including the right to apply the provisions of double taxation agreements signed by Spain.
It is important to take into account that taxation of the various capital increase options explained does not specify all of the possible fiscal consequences or the potential regulatory changes in the future that could affect the applicable tax system.
To this end, it is recommended that shareholders consult with their fiscal advisors on the specific fiscal impact of the proposed system and pay special attention to any modifications that could be made, in terms of the applicable laws on the date of the transaction, their interpretation, and the specific circumstances of each shareholder or holder of free-of-charge allocation rights.
FAQs
Explanatory note: In consideration of the terms and conditions of the programs and the rules of the securities market where the American Depositary Shares/American Depositary Receipts are admitted to trading, the options, tax regime and terms available for holders of them may have certain specialties with respect to those described herein.