Barclays starts Africa’s exit with sale of 12%

Saturday May 7, 2016

Barclays Bank chief executive Jeremy Awori during the celebration of the bank’s 100 years in Kenya on February 12 /ENOS TECHE

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Barclays Plc planned exit from Africa has started in earnest after it sold shares equivalent to a 12.2 per cent stake in South Africa-based Barclays Africa Group, it announced yesterday.

The UK firm said it has sold the first tranche of 103.6 million ordinary shares for $876 million (Sh89.08 billion) to undisclosed investors, setting in a motion the process to be completed in three years.

Barclays Plc CEO Jes Staley said in a statement the transaction was “an important first step” in reducing its 62 per cent stake in the African business, adding: “We continue to explore opportunities to reduce our shareholding, including capital market and strategic options.”

The bank traded on the London Stock Exchange is selling down its 62 per cent stake in Barclays Africa– which owns a 68 per cent stake in Kenyan business – as part of a plan to simplify the bank's structure, shore up its balance sheet and generate higher shareholder returns.

Barclays Kenya chief executive Jeremy Awori has, however, reassured the local operations will not be affected in by the sale of the African business by the parent company.

The sale, priced at a discount of 6.5 per cent, was oversubscribed multiple times and attracted "very high quality demand" from domestic and international investors, a source familiar with the matter said.

Barclays did not give any details of the investors who took part in the placing. South Africa's state pension fund Public Investment Corporation said yesterday it planned to acquire up to 10.3 million shares.

PIC, Africa's largest fund manager with more than $122 billion (Sh12.41 billion) of South African government employee pension assets under its custody, was already the second-biggest shareholder in Barclays Africa with a holding of about six per cent.

Following completion of the placing, the British lender will continue to hold 424.7 million ordinary shares or a 50.1 per cent holding in Barclays Africa, worth around $4.4 billion based on the placing price.

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