<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published June 3, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Abu Dhabi sells Barclays stake, gains US$2.5b
Move raises fears other big investors may also cash out
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>(LONDON) Abu Dhabi sold more than 11 per cent of Barclays, making US$2.5 billion from an investment that helped the British bank through the financial crisis and raising fears more may cash in on a recent rally in bank shares.
The Abu Dhabi government-owned International Petroleum Investment Company (IPIC) yesterday sold about £3.5 billion (S$8.3 billion) worth of instruments that are due to convert into Barclays shares by the end of June.
The shares were sold at 265 pence a share, said Credit Suisse, which handled the sale. The placing was at a 16 per cent discount from Monday's close of 316.25 pence.
The sale also stoked fears that other big Barclays investors may also look to take profits, and that other sovereign wealth funds might be looking to exit the investments they have made. Barclays raised funds from Qatar, China, Japan and Singapore investors last year.
'This tactical move brings into question any foreign investment in major companies - in particular investment from the Middle East,' said Manoj Ladwa, senior trader at London spread betters ETX Capital. 'I would expect further falls from companies with similar exposure.'
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT><TABLE border=0 cellSpacing=0 cellPadding=4 width=300 align=right><TBODY><TR><TD vAlign=top align=middle>
<!-- AdSpace --><IFRAME height=250 marginHeight=0 src="http://ads.asia1.com.sg/html.ng/site=tbto&sec=btointhenews&cat1=bnews&cat2=btointhenewsart&size=300X250" frameBorder=0 width=300 marginWidth=0 scrolling=no bordercolor="#000000"><script language='JavaScript1.1' src='http://ads.asia1.com.sg/js.ng/Params.richmedia=yes&site=tbto&sec=btointhenews&cat1=bnews&cat2=btointhenewsart&size=300X250'></script><noscript>
</noscript></IFRAME><!-- /AdSpace-->
</TD></TR></TBODY></TABLE>'It's clearly a negative signal for the banking sector,' said David Thebault at Global Equities in Paris. 'After stepping in at the beginning of the credit crisis to buy stakes in troubled banks, these guys (Abu Dhabi) are now saying: 'the recovery rally in financial stocks is over and the shares are now ripe for profit taking'.'
IPIC, an investment vehicle of the Abu Dhabi royal family, will have almost doubled its money since buying the mandatorily convertible notes (MCNs) in October, when Barclays raised funds privately rather than take a handout from the UK taxpayer.
The MCNs are due to convert into about 1.3 billion shares at 153 pence per share before the end of this month. Including the conversion of other MCNs sold last year but excluding warrants held by Abu Dhabi and others, the stake sold represents just over 11 per cent of the British bank.
Barclays shares have soared more than five-fold in the last three months, after Britain's regulator said its capital was adequate.
IPIC said it was also considering selling £1.25 billion of another capital instrument it bought at the same time - reserve capital instruments that pay annual interest of 14 per cent - but had no plans to sell its warrants.
Abu Dhabi invested up to £4.75 billion in Barclays, including £1.5 billion on warrants exercisable at 197 pence. Its stake will fall to about 5-6 per cent with just the exercised warrants, from potentially just over 16 per cent.
IPIC said it had a 'high regard' for Barclays and its management and strategy, but it was focusing its strategy on hydrocarbon-related investments. -- Reuters
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Abu Dhabi sells Barclays stake, gains US$2.5b
Move raises fears other big investors may also cash out
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>(LONDON) Abu Dhabi sold more than 11 per cent of Barclays, making US$2.5 billion from an investment that helped the British bank through the financial crisis and raising fears more may cash in on a recent rally in bank shares.The Abu Dhabi government-owned International Petroleum Investment Company (IPIC) yesterday sold about £3.5 billion (S$8.3 billion) worth of instruments that are due to convert into Barclays shares by the end of June.
The shares were sold at 265 pence a share, said Credit Suisse, which handled the sale. The placing was at a 16 per cent discount from Monday's close of 316.25 pence.
The sale also stoked fears that other big Barclays investors may also look to take profits, and that other sovereign wealth funds might be looking to exit the investments they have made. Barclays raised funds from Qatar, China, Japan and Singapore investors last year.
'This tactical move brings into question any foreign investment in major companies - in particular investment from the Middle East,' said Manoj Ladwa, senior trader at London spread betters ETX Capital. 'I would expect further falls from companies with similar exposure.'
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT><TABLE border=0 cellSpacing=0 cellPadding=4 width=300 align=right><TBODY><TR><TD vAlign=top align=middle>
<!-- AdSpace --><IFRAME height=250 marginHeight=0 src="http://ads.asia1.com.sg/html.ng/site=tbto&sec=btointhenews&cat1=bnews&cat2=btointhenewsart&size=300X250" frameBorder=0 width=300 marginWidth=0 scrolling=no bordercolor="#000000"><script language='JavaScript1.1' src='http://ads.asia1.com.sg/js.ng/Params.richmedia=yes&site=tbto&sec=btointhenews&cat1=bnews&cat2=btointhenewsart&size=300X250'></script><noscript>
IPIC, an investment vehicle of the Abu Dhabi royal family, will have almost doubled its money since buying the mandatorily convertible notes (MCNs) in October, when Barclays raised funds privately rather than take a handout from the UK taxpayer.
The MCNs are due to convert into about 1.3 billion shares at 153 pence per share before the end of this month. Including the conversion of other MCNs sold last year but excluding warrants held by Abu Dhabi and others, the stake sold represents just over 11 per cent of the British bank.
Barclays shares have soared more than five-fold in the last three months, after Britain's regulator said its capital was adequate.
IPIC said it was also considering selling £1.25 billion of another capital instrument it bought at the same time - reserve capital instruments that pay annual interest of 14 per cent - but had no plans to sell its warrants.
Abu Dhabi invested up to £4.75 billion in Barclays, including £1.5 billion on warrants exercisable at 197 pence. Its stake will fall to about 5-6 per cent with just the exercised warrants, from potentially just over 16 per cent.
IPIC said it had a 'high regard' for Barclays and its management and strategy, but it was focusing its strategy on hydrocarbon-related investments. -- Reuters
</TD></TR></TBODY></TABLE>
