African investors take over as Barclays PLC reduces stake to 16.4% in Africa

Barclays PLC reduces ownership in Barclays Africa to 23.4% in overnight bookbuild

Additional 7% to be taken up by the Public Investment Corporation at a later date

Share placement multiple times subscribed

Barclays Africa emerges with significantly more diverse shareholder base

Barclays Africa PLC has reduced further its stake in Barclays Africa Group Limited to 16.4%, following the sale of some 285,691,979 Barclays Africa ordinary shares at a price of R132 per share.

The transaction which see the bank give away some 33.7% of its stake in its African operations, resulted in the deconsolidation of Barclays Africa from Barclays PLC, described as South Africa’s largest bookbuild in South African Rands.

The aggregate gross sale proceeds were approximately R37.7 billion.

According to the Barlcays Africa Group Limited, the transaction saw Barclays PLC reducing its shareholding to 23.4%, with a further 7% to be taken up by the Public Investment Corporation at a later date, following receipt of the necessary regulatory approvals.

Address a media conference in Johannesburg, South Africa yesterday an obviously excited Barclays Africa Group Chief Executive Officer Maria Ramos said, the completion of the transaction demonstrates an investor appetite for Barclays Africa which now has become portrays the business as a Pan African one.

“This is indeed a historic moment for us as company. As the bank is a now a standalone Pan African Business with investors showing confidence plus we see a diversified shareholder base with most shareholders now being indigenous Africans. So, there is now increase in local ownership of the Barclays Africa group.

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,” Maria Ramos, Barclays Africa Group Chief Executive Officer said.

Ms Ramos added that “total shares of Barclays PLC is now 16.4% and in addition Barclays PLC has agreed to contribute 1.5% of the issued share capital of the group to an economic empowerment scheme and that would be happening in due course. And so that would leave Barclays PLC with a residual shareholding of approximately 15% in the Africa group of Barclays.”

The shares in the overnight bookbuild were multiple-times subscribed and sold to a mix of existing and new investors, both locally and internationally, this according the Africa Group CEO resulted in an aggregate gross sale proceeds of approximately R37.7 billion.

She also added that with the completion of the transaction, 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.

The overwhelming investor interest in this bookbuild process that took place overnight has given Barclays PLC the opportunity to expedite the process of its intention to sell the majority of its shareholding in Barclays Africa Group over a period of two to three years. Barclays PLC owned 62.3% of Barclays Africa Group as at March 2016.

According to a statement which was also issued yesterday, “as announced in February 2017, Barclays PLC has 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 statement also added that “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.”

Meanwhile ownership of Barclays and Absa operations in Africa does not change as a result of the reduction in shareholding. Also 11 banks that form part of Barclays Africa will continue to be led and operated by people with deep local knowledge and a diversity of skills and experience.

On 5 May 2016, Barclays Bank PLC sold 103.6 million shares in Barclays Africa in a bookbuild, reducing its shareholding to 50.1% after its announced on March 1, 2016 that it intended reducing its 62.3% shareholding in Barclays Africa over time because of regulatory changes in the UK.

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