ACS Actividades de Constrccn y Srvcos : Increases and decreases of share capital

Microsoft Word - HR_Documento Informativo_04_01_2016_EN ACS, Actividades de Construcción y Servicios, S.A.

Comisión Nacional del Mercado de Valores Edison, 4

28006 MADRID

Madrid, 4 January 2016

Dear Sirs,

For the purpose established in section 82 of Act 24/1988, of 28 July, regulating the Securities Market, and supplementary provisions, I am informing you of the following Significant Event:

ACS Actividades de Construcción y Servicios, S.A. resolved today to carry out the second execution of the capital increase charged to reserves which was passed by the Ordinary General Shareholders' Meeting on 28 April 2015. The operation aims to implement a flexible remuneration to shareholders ("Scrip Dividend"), with the purpose of allowing shareholders to choose between receiving cash remuneration or new shares in the Company.

Likewise, the Company resolved to execute the capital reduction by means of the retirement of treasury shares that was passed at the same General Meeting, in an amount equal to the effective amount of the share capital increase as a result of the first execution mentioned in the preceding paragraph.

Enclosed is an Information Document for the purposes provided in articles 26.1.e) and 41.1.d) of Royal Decree 1310/2005, of 4 November, in section 3.1 which contains the schedule of the operation.

Sincerely,

José Luis del Valle Pérez Director & Secretary General

INFORMATION DOCUMENT CAPITAL INCREASE CHARGED TO RESERVES ACS, ACTIVIDADES DE CONSTRUCCIÓN Y SERVICIOS, S.A.

4 January 2016

This Information Document has been prepared pursuant to the provisions in articles 26.1 d) and 41.1d) of Royal Decree 1310/2005.

1. Object

   The Annual General Meeting of Shareholders of ACS, Actividades de Construcción y Servicios, S.A. ("ACS" or the "Company") held on 28 April 2015 resolved to increase the share capital of ACS charged to voluntary reserves in an amount to be determined according to the terms established in the agreement itself (the "Capital Increase"), "), as well as to simultaneously reduce the share capital of the Company by an amount equal to the amount of the share capital that is actually issued as a consequence of the Capital Increase (the Capital Increase and this reduction are the "Resolution"), delegating the execution of the resolution to the Board of Directors (with express powers of substitution) (the "Resolution" pursuant to article 297.1.a) of the Capital Companies Act, approved by Legislative Royal Decree 1/2010, of 2 July (the "Capital Companies Act").

   According to the terms of the Resolution, the maximum reference fair value of the Capital Increase is 366 million euros and it may be exercised within the year following the date of the Resolution on one or two occasions at the very most, and the reference fair value is not to exceed 224 million euros in the First Execution, or 142 million euros in the second execution, in the event it is carried out.

   The Board of Directors of the Company, at its meeting held on 17 December 2015, among, and using the powers of delegation in the Resolution, delegate indiscriminately to the Executive Commission, the Chairman of the Board of Directors and the Director and Secretary so that they may carry out any actions they deem appropriate or necessary for the execution of everything contained in the Resolution and they may sign any documents required or considered appropriate for the above-mentioned purposes.

   By virtue thereof, on 4 January 2016, resolved to carry out resolved to carry out a Second Execution of the Capital Increase (the "Second Execution") setting the maximum reference value of said Second Execution (Amount of the Executed Option) at 142 million euros. In the event (a mere theoretical possibility) that none of the shareholders were to choose to sell their rights to the Company pursuant to the Purchase Commitment (section 2.2 below) and that the PreCot (quoted price, the reference Price used to determine the number of shares to be issued, see also section 2.2 below) coincides with the closing share price of the day before the date of this document, this Second Execution would determine a capital increase of approximately 1.72 %. However, as a consequence of the simultaneous capital reduction by means of the amortisation of shares that is mentioned in section 2.1 below, in any event following the increase and the reduction, the current share capital amount will remain unchanged.

   Pursuant to the provisions in articles 26.1.e) and 41.1.d) of Royal Decree 1310/2005, of 4 November, it is not necessary to prepare and publish a prospectus in respect of the issuance and Listing of the shares issued as a consequence of the Second Execution insofar as the existence of this information document means that a document is available with information on the number and nature of the shares and the reasons for and details of the offer.

   The purpose of this information document is to furnish the information among that mentioned above which is available as of the present date. Once the First Execution is executed and the remaining information is available, it will be disclosed as a supplement to this information document. The disclosure of the Second Execution of the Capital Increase and of the particulars thereof that are yet to be concretised by means of a supplement to this information document is scheduled to take place on 13 January 2016.

   
   

2. Purpose and functioning of the Capital Increase

   
   
3. Purpose

   The purpose of the transaction forming the object of this Informative Document is to offer the shareholders of the Company, in lieu of what would be an interim cash dividend, fully paid-up shares

   with the possibility of immediately monetising the free allotment rights corresponding to said shares through their sale to the Company at a pre-defined price.

   The transaction is in line with similar transactions carried out by ACS, as in 2012, 2013,2014 and 2015, and with the practices of other important listed companies in recent years. It involves remunerating the shareholder in accordance with a flexible "optional dividend" which enables to receive and retain the shares o the receipt of money in conditions which are equivalent, including as regards taxation, to those of an actual dividend.

   Likewise, at the time of the Second Execution, has resolved to partially execute the capital reduction by means of the amortisation of treasury shares established in the Resolution in a nominal amount equal to the actual nominal amount of the Second Execution, simultaneously thereto. With this reduction, the shareholders who decide to transfer their free allocation rights as a consequence of the Second Execution will not be subject to a dilution of their ownership interest in the Company.

   
   

4. Functioning

   The shareholders of the Company will receive a free allocation right for each ACS share in their possession. These shall be negotiable rights, and therefore they may be transferred on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges during a term of 15 calendar days, after which the rights will automatically become newly issued shares of ACS, and they will be attributed to those who at the time are holders of free allocation rights.

   Therefore, at the time of the Second Execution, the shareholders of ACS will be free to choose between:

5. Not transferring their free allocation rights. In such event, at the end of each trading period the shareholder will receive the fully liberated new shares to which he is entitled. This allocation of shares is not subject to withholding for tax purposes.

6. Transferring the entirety or part of their free allocation rights to ACS by virtue of the Purchase Commitment assumed by ACS at a guaranteed fixed price for the Second Execution (the "Purchase Commitment"). In this way, a shareholder would choose to monetise his rights, receiving the Executed Option in cash rather than receiving shares. Rights that were acquired on the secondary market cannot be transferred. The free allocation rights may only be transferred by the shareholders who appear as such on the book records of Sociedad de Gestión de los Sistemas de Registro (Iberclear) at 23:59 hours on the date of publication of the announcement of the Second Execution in the Mercantile Registry Official Gazette (BORME). The tax regime applying to the amount received as a consequence of choosing this option is the same as for cash dividends, therefore the amount payable to shareholders shall be subject to the relevant withholding.

7. Transferring the entirety or part of his free allocation rights on the market. In this case a shareholder would also choose to monetise his rights, but he would not receive a guaranteed fixed price, because the consideration for the rights would depend on the market conditions in general and on the quoted Price of those rights in particular. Amounts obtained from the sale of rights on the market are not subject to withholding for tax purposes.




Also, shareholders may combine the above options (that is, they may choose one or more of them in respect of the entirety or part of the rights and shares to which they are entitled in the Second Execution of the Capital Increase), depending on what they freely decide.

Shareholders who do not communicate a specific decision will receive the number of new shares to which they are entitled.