Middle Eastern investor to sell Barclays shares
LONDON — A major Middle Eastern shareholder in Barclays bank said Tuesday it intends to sell part of its stake — at least 1.3 billion shares — potentially taking a big profit on its seven-month investment and sending Barclays shares down more than 13 percent.
The shares traded at 274 pence in early trading on the London Stock Exchange following the announcement by International Petroleum Investment Company (IPIC) of Abu Dhabi.
Barclays PLC turned to investors from Abu Dhabi and Qatar in November for a total injection of up to 7.3 billion pounds ($12 billion) to shore up its balance sheet, rather than take on the British government as a major shareholder, as Royal Bank of Scotland and Lloyds Banking Group did.
The Abu Dhabi company invested 2 billion pounds in Barclays, but the shares currently are worth about 4 billion pounds.
IPIC, controlled by the government of Abu Dhabi, said it planned to sell 1.3 billion shares in Barclays held by its subsidiary, PCP Gulf Invest 1 Ltd.
IPIC said a second subsidiary, PCP Gulf Invest 2 Ltd., was considering the sale of its stake, but declined to specify how large it was. A third unit — PCP Gulf Invest 3 Ltd. — had no current intention to sell its shares.
Barclays said IPIC would continue to hold warrants which could be swapped for 758 million shares at 197.775 pence.
Khadem Al Qubaisi, the managing director of IPIC, said it intended to “maintain a close commercial and strategic relationship with Barclays.”
“The decision to dispose of some of its interests in Barclays reflects the focus of IPIC’s long-term investment strategy on hydrocarbon-related opportunities,” he added.
The Abu Dhabi investments are in the form of mandatorily convertible notes and reserve capital instruments.
Alex Potter, analyst at Collins Stewart, said he “wouldn’t like to second-guess what Abu Dhabi’s intentions are, but that the very least it is a reflection of a very strong bounce in Barclays share price” which will yield a considerable profit.
IPIC has traditionally kept a lower profile than other Abu Dhabi state-owned funds, primarily keeping its focus on investments in the oil and chemical industries.
However, IPIC has also become the majority owner of Aabar Investments PJSC, a partially public Abu Dhabi investment firm that last month took a 9.1 percent stake in Mercedes-Benz parent Daimler AG. Aabar is now the German automaker’s largest shareholder.
IPIC recently took the rare step among the region’s government funds in seeking out credit ratings. The move opened the firm up to increased scrutiny, but also improved its access to buyout financing. Its decision to cash in on its Barclays stake will give IPIC increased liquidity to spend on other investments.
IPIC is chaired by Sheik Mansour Bin Zayed Al Nahyan, a prominent member of Abu Dhabi’s ruling family, which controls the United Arab Emirates presidency. He led the takeover of English football team Manchester City.
AP Business Writer Adam Schreck in Dubai, United Arab Emirates, contributed to this report.
On the Net: group.barclays.com/Investor-Relations/
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