ASIAN and Middle Eastern investors took substantial stakes in Barclays yesterday after the majority of shareholders turned their backs on the bank's £4.5 billion fund raising plan.
Barclays revealed that fewer than one-fifth of existing shareholders opted to buy new shares as part of the scheme launched to help strengthen its balance sheet.
That translated to an investment of around £750 million. It left Asian and Middle Eas
tern banks and sovereign wealth funds contributing the bulk of the funds – and owning most of the new shares.
The biggest new investor is the cash-rich Qatari Investment Authority (QIA), which now owns around 6 per cent of Barclays worth an estimated £1.4bn.
Also new on board is Challenger, a investment vehicle led by the Qatari royal family, which is putting in around £400m for a stake of around 2 per cent.
Japanese group Sumitomo Mitsui Banking Corporation is paying £500m for a 2.1 per cent holding, with Barclays' existing shareholder China Development Bank maintaining a 3 per cent stake with a £156m injection.
Singaporean sovereign wealth fund Temasek is contributing in the region of £160m, and more than a dozen other big institutional investors are also taking part.
Barclays chief executive John Varley said yesterday that the bank was looking forward "to building on our relationships with our new shareholders". He added that Barclays appreciated the support of existing owners, including China Development Bank, and Temasek.
Most of the new shares were on offer at 282p, but the bank's stock had dipped below that in recent days amid concerns over further writedowns in the banking industry and general economic gloom.
Barclays' capital raising was, however, effectively underwritten by the major investors such as QIA and Challenger.
The uptake by these funds – which boosted the banks' share price yesterday – marks the latest hefty investments from cash-rich Asian and Middle Eastern sovereign wealth funds and investment groups in US and UK firms.
Barclays had been under pressure to increase its capital reserves after suffering a £2.64bn hit from the crisis in credit markets and collapse of the US subprime mortgage market.
The full article contains 360 words and appears in The Scotsman newspaper.
