Business News of Mon, 5 Jun 20171
Barclays Africa builds diverse shareholder base
Barclays Africa Group Ltd has sold 33.7 per cent of Barclays Africa’s issued share capital at a price of R132 per share.
This means that Barclays Africa has been deconsolidated from Barclays PLC.
Barclays PLC sold 285,691,979 of Barclays Africa ordinary shares at a price of R132 per share, which resulted in Barclays PLC reducing its shareholding to 23.4 per cent, with a further seven per cent to be taken up by the Public Investment Corporation of South Africa at a later date, when the necessary regulatory approvals are received.
The shares sold through a book building exercise overnight 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 R37.7 billion (about $2.94 billion).
Barclays PLC announced in March 2016 that it would reduce its shareholding in its Africa operations from 62.3 per cent over time.
“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 Group Chief Executive Officer (CEO) of Barclays Africa, Ms Maria Ramos, said.
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.
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 on 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”.
Barclays PLC will contribute the equivalent of 1.5 per cent of Barclays Africa’s market capitalisation, equating to approximately R1.85 billion (based on Barclays Africa’s share price of R145.95 as at May 30, 2017), towards the establishment of a broad-based black economic empowerment scheme.
As announced in February 2017, Barclays PLC had agreed to contribute approximately R12 billion (£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 diversity of skills and experience.
“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,” Ms Ramos said.