Text size [+][-] Friday November 20 2009GLOBAL EDITION
Home > Barclays
By Hugo Dixon
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Barclays announced a plan to raise £7bn from Qatar Holding, an arm of the Qatar Investment Authority; Challenger, an investment vehicle owned by the Qatari Shiekh Hamad Bin Jassim Bin Jabr Al-Thani; and Sheikh Mansour Bin Zayed Al Nahyan of Abu Dhabi. They would own a combined 32% of Barclays if the entire package were enacted. The capital raising includes £3bn of reserve capital instruments, which pay an annual coupon of 14% until June 2019; warrants to subscribe to 1.5bn new ordinary shares at 197.775p each, exercisable at any time for five years; and £2.8bn of mandatory convertible notes which will pay an annual coupon of 9.75%. The conversion price on the converts is 153.276p. Barclays will pay £300m of commissions, fees and expenses, including a 4% commission on the mandatory converts; 2% for the reserve capital; and £66m to Qatar Holding for helping arrange some of the capital raising. A shareholder vote on the package is scheduled for November 24. The capital raising will lift Barclays Tier 1 ratio to 11.3% and its equity Tier 1 ratio to 7.6% on a pro forma basis as at June 30. Barclays said it intends to resume paying a dividend in the second half of 2009. It added in a separate interim management statement that group profit before tax for the nine months ended September 30 was slightly ahead of 2007. Net losses from credit market write-downs in the third quarter were £129m. This included £1.2bn of write-downs offset by £1.1bn of gains on the fair valuation of its own debt.
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