Repsol today held an Extraordinary General Shareholders Meeting, at which all the resolutions presented by the Board of Directors were approved. These resolutions included the following:

• A capital increase of 240 million shares, with the option of further increase to a total of 288 million shares, over which pre-emptive rights of subscription are waived. The Extraordinary General Shareholders Meeting ("GSM") authorised the Board to set a date for the execution of this issue, which shall be within one year from today, and to determine the structure and timing of the offer. The issuing price of the shares shall be determined according to a procedure approved at the GSM.
• An issue of debt securities convertible and/or exchangeable into shares of stock of the Company of the amount of 2 billion euros, over which pre-emptive rights of subscription are waived. The GSM delegated the Board of Directors authority to execute this resolution within one year from today, and to determine the bases and characteristics of the conversion and/or exchange.
• Advance of the payment date of the final dividend for the 1998 financial year to July 1^st, instead of July 8^th as approved at the General Shareholders Meeting of March 24^th 1999.
• Limitation of the maximum number of votes that may be cast at a General Shareholders Meeting by a single shareholder or by companies belonging to a single group to 10% of voting capital stock.

After giving details of the strategic rationale for Repsol�s public tender offer for the 85% of YPF which it does not already own, the Chairman of Repsol, Alfonso Cortina, explained that this capital increase was necessary to finance this transaction. This capital increase is equivalent to approximately 30% of the company�s equity capital. Its size makes it necessary to follow as closely as possible the standard procedure for a public offering of securities, with a retail tranche, a Spanish institutional tranche and an international institutional tranche. The aim, according to Repsol�s Chairman, "is to rebuild a suitable capital structure, following the public share offering, so that the debt to equity ratio is the ideal for a corporate financial structure".

For this capital increase, the GSM approved the waiver of shareholders� pre-emptive right of subscription. This formula allows the new shares to be priced as near as possible to the market price, as well as reducing market risk by allowing a shorter subscription period than would be the case if pre-emptive rights were applied. This approach should benefit both the company and all its shareholders, whether or not they subscribe in the offering, mainly by avoiding dilutive effects. Mr. Cortina announced that a certain proportion of shares will be reserved for existing shareholders in the relevant tranches, so as to give preference to their subscription requests.