03. The Sacyr Vallehermoso Group

Changes in the group’s size, structure and ownership

Changes in the group’s size, structure and ownership

There are several significant events occurring in 2011 to report under this heading:

Highlights of the year

• On 4 January 2011, the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores) verified that the requirements and conditions governing the admission to trading of the company’s 89,184,845 new shares, with a par value of one euro (1) each, had been met. Effective trading of these shares took place on 6 January.

• On 25 February 2011, payment was made and a deed was executed to increase the capital of Sacyr Vallehermoso in the amount of 96,101,220, whereby 16,016,870 shares were issued, each having a par value of one euro. Under the terms of the rights issue, each shareholder had a preemptive right to buy 2 new shares for every 49 existing shares already held. New shares were issued at a par value of 1 plus an issue premium of 5 per share, resulting in an issue price of 6 per share. The rights issue was fully subscribed, and the new shares started to trade on 3 March 2011.

• On 31 March 2011, an issue of bonds convertible into and exchangeable for newly issued ordinary shares or outstanding shares, on which preemptive rights were waived, for a nominal amount of 200 million of euros was carried out, through the issue and subscription of 4,000 bonds with a par value of 50,000 each, maturing on 1 May 2016. The bonds will earn an annual nominal fixed interest rate, payable on a quarterly basis, of 6.50%. The initial conversion price was set at 10.61 (although it was subsequently adjusted to 10.30 as a result of the bonus share issue). The subscription and payment of the bonds took place on 12 April; the bonds were admitted to trading on the same date on the unregulated organized secondary market (Freiverkehr) of the Frankfurt Stock Exchange.

• On 3 June, the Board of Directors of Sacyr Vallehermoso, in execution of the resolutions adopted by the General Shareholders’ Meeting of 19 June 2011, agreed to carry out a capital increase with a charge to restricted reserves for a total amount of 12,429,366, through the issue of 12,429,366 ordinary shares with a par value of one euro each. The new shares began trading on 11 July 2011.

• On 20 December, Sacyr Vallehermoso sold 10% of its shareholding in Repsol, 122,086,346 shares, at a price of 21,066 per share. On 22 December, it concluded the refinancing of 10.01% of the remaining shareholding, by means of a non-cancellable modifying renewal of the initial credit, thus extending the final maturity until 31 January 2015. The refinanced amount stands at 2,446 million of euros with an interest rate of Euribor+350bp

Accounting effects with an impact on profit or loss

Net profit in 2011 was affected by three major accounting impacts:

• The partial disposal of the investment in Repsol (10%) in December, reducing the current stake to 10.01%. This sale generated a capital loss of 940 million of euros for the difference between the selling price and the carrying amount of the investment, with no impact on cash.

• The write-off, in keeping with criteria of prudence, of the entire carrying amount of certain concession assets (the Madrid- Levante motorway and the Madrid radial roads) after changes in the assumptions made in their valuation. The impairment also had no impact on cash flow, but detracted 445 million of euros from net profit.

• The one-off recognition of working capital provisions and fair-value adjustments for a net 117 million of euros.

• These three factors, coupled with Repsol’s negative contribution to SyV’s bottom line of 208 million of euros – for the impairment loss recognised in order not to increase the carrying amount of the investment – explain why SyV showed a net attributable loss of 1,604 million of euros in 2011. Recurring operating profit totalled 106 million of euros.