Tech and Web NEWS
A review: Why John Varley CEO Barclays looks to Middle East for funding & Who is Sheikh Mansour?
By Amarendra Bhushan for CEOWORLD Magazine Updated:October 31, 2008
Get CEOWORLD Magazine digital monthly version. special- Top Capital Cities for a business Traveler, # Interview with Minister of Tourism of Greece. 1 Issues Subscription= $1 Only, 10 Issues Subscription= $5 Only. Grab your copy now!!!!
The Board of Directors of Barclays today announces a proposal to raise up to £7.3 billion of additional capital from existing and new strategic and institutional investors. The Capital Raising, which is subject to approval by Barclays shareholders, will be effected through an issue of £3 billion of Reserve Capital Instruments, with an associated issue of warrants, and an issue of up to £4.3 billion of Mandatorily Convertible Notes.
As a result of the Capital Raising, Barclays expects to fully satisfy its commitment, as announced to the market on 13th October 2008, to raise new external capital as part of its overall plan to achieve the new higher capital targets set by the UK Financial Services Authority for all UK banks.
The Capital Raising will:
enable Barclays simultaneously to achieve its tier one and equity capital issuance commitments to the FSA with certainty and ahead of the previously announced timetable;
strengthen links with existing large shareholders and introduce a substantial new investor to Barclays; and
provide the opportunity for existing institutional shareholders to participate in the Capital Raising by subscribing for Mandatorily Convertible Notes.
According to press reports, existing shareholder Qatar Investment Authority (QIA) will provide up to £2 billion, with the remainder coming from members of the royal families of Qatar and Abu Dhabi.
QIA is a sovereign fund set up to achieve revenue diversification for the state of Qatar. In June of this year, QIA, its chairman and Sumitomo Mitsui Banking Corporation of Japan, joined in a £4.5 billion fundraising aimed at increasing the bank’s Tier 1 ratio.
Barclays is pursuing a course of self-determination rather than making use of the Government’s bank rescue package and risk Treasury representatives on its board and a cut in executive bonuses.
The bank says it is seeking to raise a further £1.5 billion from existing and new investors, to boost its capital position.
Banking giant Barclays said Middle Eastern investors were pumping up to £7.3 billion into the business.
The cash injection from Qatari investors and the Abu Dhabi royal family comes as the bank looks to avoid calling on taxpayer funds to strengthen finances weakened by the credit crunch.
The funding move follows an earlier £4.5 billion cash call by the bank in June.
Qatar Holding and Challenger – a wealthy vehicle led by the Qatari royal family – are already investors in the group.
Barclays has also brought on board Sheikh Mansour Bin Zayed Al Nahyan – a member of the Abu Dhabi royal family – as a substantial new investor.
The Middle Eastern trio could end up owning almost a third of the bank when the warrants and notes issued by the bank are converted into ordinary shares.
Barclays said the funding move would allow it to meet the tougher requirements of the Financial Services Authority to help banks withstand financial turmoil.
The cash will boost its core tier one ratio – a key measure of capital strength – to 7.6%, the bank said. It shares rose 8% following the announcement.
Not using public funds to shore up the business also means that Barclays will be able to pay dividends to its shareholders – unlike Royal Bank of Scotland and Halifax Bank of Scotland.
Chief executive John Varley said: “Today’s capital raising provides certainty and speed of execution.”
Sheikh Mansour Bin Zayed Al Nahyan
a member of Abu Dhabi’s royal family
- promised to invest up to 3.5 billion pounds ($5.7 billion) in Barclays Plc
- giving him a stake of up to 16.3 percent in Britain’s second-biggest bank.
- one of the brothers of Sheikh Khalifa bin Zayed al-Nahyan, ruler of Abu Dhabi and president of the United Arab Emirates.
- chairman of both the Emirates Horse Racing Authority and the Al Jazeera soccer club
- in September bought English soccer club Manchester City.
- Married to Sheikha Manal bin Mohammed bin Rashid al-Maktoum, daughter of Dubai Prime Minister and ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum.
- He is Minister of Presidential Affairs, chairman of Abu Dhabi Petroleum Investment Company, chairman of First Gulf Bank FGB.AD, a member of the Higher Council for Petroleum, Emirate of Abu Dhabi, and deputy chairman of the Sheikh Zayed Charitable and Humanitarian Foundation.
John Varley
Group Chief Executive (Board and Executive Committee member)
John was appointed as Group Chief Executive on 1 September 2004, prior to which he had been Group Deputy Chief Executive from 1 January 2004.
He held the position of Group Finance Director from 2000 until the end of 2003. John joined the Executive Committee in September 1996 and was appointed to the Board in June 1998.
He was Chief Executive of Retail Financial Services from 1998 to 2000 and Chairman of the Asset Management Division from 1995 to 1998.
John is a non-executive director of AstraZeneca PLC. He is also Chairman of Business Action on Homelessness, President of the Employer’s Forum on Disability, President of the UK Drug Policy Commission and a member of the International Advisory Panel of the Monetary Authority of Singapore.
Like this article! |
|
|
|
|
(No Ratings Yet)
Loading ...171,373 views
Comments
Grab a copy of CEOWORLD Magazine for $1 only!!!
