Barclays UK has completed the final round of its share sale to reduce stake in Barclays Africa 23.4 percent.
This was after Barclays UK closed an engagement with investors last night to sell 287 million shares at 132 rands in Barclays Africa worth $2.8 billion. This represents almost 34 percent stake in the Africa group.
According to a statement released by Barclays Africa, the transaction with investors to sell the shares can be described as the largest book building in South Africa. It also noted that this would finalise the deconsolidation of Barclays Africa from Barclays PLC.
The statement added that the shares in the overnight book-build were multiple times subscribed and sold to a mix of existing and new investors, both locally and internationally. The aggregate gross sale proceeds were approximately 37.7 billion rands.
Barclays PLC would reduce its shareholding over time.
"The overwhelming investor interest in this book build process that took place overnight has given Barclays PLC the opportunity to expedite this process," the statement said.
Maria Ramos, Barclays Africa Group Chief Executive Officer said, “the completion of this transaction demonstrates an exceptionally healthy investor appetite for Barclays Africa and our strategy of becoming a leading standalone financial services group in Africa."
"The significance of this sell-down is that Barclays PLC is no longer the controlling shareholder of Barclays Africa, which now has a diverse shareholder portfolio made up of very supportive, long-term, institutional and individual investors.
"Barclays PLC will remain an important shareholder and will support Barclays Africa throughout the sell-down and operational separation processes, which are already well underway," she noted.
Barclays PLC and Barclays Africa will continue to work with regulators to ensure that the sell-down and separation are managed appropriately, with no unnecessary impact to stakeholders or the business.
According to Ms Ramos, independence from Barclays PLC will create several opportunities, which will ultimately result in benefits for different stakeholders.
“This is a very exciting time for Barclays Africa. There is an opportunity for increased African ownership of our business through a planned staff share scheme as well as a broad-based black empowerment scheme that will contribute to the growth of an entrepreneurial culture,” she said.
Barclays PLC will contribute the equivalent of 1.5% of Barclays Africa’s market capitalisation, equating to approximately R1.85 billion (based on Barclays Africa’s share price of 145.95 rands as at 30 May 2017), towards the establishment of a broad-based black economic empowerment scheme.
As announced in February 2017, Barclays PLC has agreed to contribute approximately 12 billion rands (£765 million) primarily to fund the investments required for Barclays Africa to complete the separation from Barclays PLC.
The contribution will, in part, go towards investments in technology, rebranding and other separation projects. This process presents an opportunity to modernise and harmonise systems across Barclays Africa operations.
Ownership of Barclays and Absa operations in Africa does not change as a result of the reduction in shareholding. The 11 banks that form part of Barclays Africa will continue to be led and operated by people with deep local knowledge and a diversity of skills and experience.
Barclays PLC announced on March 1, 2016, that it intended reducing its 62.3 percent shareholding in Barclays Africa over time because of regulatory changes in the UK.
On May 5, 2016, Barclays Bank PLC sold 103.6 million shares in Barclays Africa in a bookbuild, reducing its shareholding to 50.1 percent.
Ms Ramos concluded: “This is a defining moment for Barclays Africa. We now have a significant opportunity to determine our own destiny and make our own decisions on what is right for a pan-African focused business”.
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