Authorization to make share capital increases by NH Hoteles S.A.

[28/11/2006]

Comisión Nacional del
Mercado de Valores
Pº de la Castellana, 19
28046 Madrid

Att.: D. Antonio Más


Dear Sirs,

In compliance with the information obligation established in the Article 82 of the Spanish Public Company Act ("Ley del Mercado de Valores") we communicate to you the following relevant fact ("HECHO RELEVANTE") with the purpose of making it public prior to its submission to the media and the analysts covering NH Hoteles:

"The Board of Directors of NH Hoteles has agreed in a meeting celebrated for this specific purpose to exercise the authorization to make share capital increases granted by the General Shareholders Meeting on 5 May 2006, and approve a share capital increase requiring a cash contribution of up to 32,743,942 Euros. The capital increase implies an issuance of up to 16,371,971 new shares with a nominal value of 2.00 Euros per share.

The new shares will be of the same class and series as the existing shares, and will be issued at a premium of 13.27 Euros per share. The Board of Directors delegates in the Executive Commission ("Comisión Delegada") the ability to eventually increase the premium.

A full subscription of the share capital increase at the minimum price of 15.27 Euros per share, as described before, will increase NH Hoteles’ shareholders’ equity by 250 million Euros.

The holders of existing shares will have a preferred subscription right with respect to the share capital increase. The subscription right will also apply to those holders of shares that will be issued in the share capital increase approved the General Shareholders Meeting to cover the exchange of Sotogrande’s shares into NH Hoteles’ shares as a result of the tender offer launched by NH Hoteles over Sotogrande, which is currently in progress.

The Board of Directors of NH Hoteles has also agreed to apply for the admission of the new shares for listing on the Spanish Stock Exchanges, as well as its trading in the SIBE ("Mercado Continuo"). This equity offering is still pending registration and verification of the correspondent Offering Memorandum by the Spanish Stock Exchange Regulator ("Comisión Nacional del Mercado de Valores").

For information purposes, we also disclose that a significant number of shareholders with relevant stakes in the share capital have expressed their interest in subscribing shares in the capital increase."

Yours truly,