Flipping Barc
Posted by
Paul Murphy on Jun 02 10:35. In addition, His Highness Sheikh Mansour Bin Zayed Al Nahyan, a member of the royal family of Abu Dhabi, and Chairman of Abu Dhabi’s International Petroleum Investment Company is investing speculating a total of £3.5bn.
We have sought over the last two years to develop the share register of Barclays to reflect, increasingly, the sources of new capital in the world, and to create strong alignment with regions which have growing economic power and consequent business flow. Today’s announcements are a further step in that direction, and our motivation, as we cement and develop relationships with investors such as these, is to create the opportunity for new and additional income streams through time.
That’s an edit, of course, of John Varley’s statement last autumn when Barclays announced the infusion of Middle Eastern cash aimed squarely at avoiding a bailout by the British government.
His Highness the Sheikh has
now instructed the managing director of IPIC, H.E. Khadem Al Qubaisi, to begin selling down that Barclays holding.
Abu Dhabi’s wad of mandatory convertible notes have been switched into 1.3bn shares and were placed by Credit Suisse on Monday evening at a rumoured price of 267p - raising just a little under £3.5bn.
IPIC is also considering a sale of the 14 per cent Step Up Callable Reserve Capital Instruments issued by Barclays in the autumn. Those were purchased for £1.2bn; current value unknown.
But IPIC will hold on to the warrants it received as a kicker at the time. These offer Abu Dhabi the chance to subscribe for 760m shares at 198p apiece anytime up until the autumn of 2013, allowing Al Qubaisi to declare on Tuesday:
IPIC has a high regard for Barclays, and great confidence in its management team and ongoing strategy. The Emirate of Abu Dhabi intends to maintain a close commercial and strategic relationship with Barclays in the future. The decision to dispose of some of its interests in Barclays reflects the focus of IPIC’s long-term investment strategy on hydrocarbon-related opportunities.
How long before we’re running a strike through that quotation?
His Highness the Sheikh has clearly had a near death experience investing in the financial sector. He helped bail out Barclays, brought on a political backlash, and then watched the Barc share price plummet to below 50p. The fact that he’s now able to get out at a handsome profit will no doubt bring a sense of relief rather than celebration.
But what are those “hydrocarbon-related opportunities?”
The Sheikh is clearly about to buy something else - and it won’t be financial. Why else sell Barc notes yielding 14 per cent?