Barclays pulls out of Africa
Barclays is learning the hard way that Africa is not for sissies. The British banking behemoth, which holds shares in ABSA, has long mulled pulling out of Africa.
Barclays Plc is weighing selling a 16% stake in its Africa unit on the market once it gets regulatory approval to separate from the business, according to people with knowledge of the plans.
The sale could raise as much as US$1.5 billion based on the current share price of Barclays Africa Group Ltd., said the people, who asked not to be named because the matter is confidential.
The stock will probably be sold via an accelerated book build offering, they said. Barclays could decide to amend the size of the sale after receiving the go-ahead, the people said.
Barclays is seeking to sell down its remaining 50.1% stake in its African business to less than 20% in order to deconsolidate the unit from its accounts, releasing capital that can be invested elsewhere in the business.
Chief executive officer Jes Staley, 60, decided to reduce the lender's presence on the continent in favour of supporting a trimmed-down investment bank focused on London and New York.
The latest phase of the sell-down was delayed after South African President Jacob Zuma on March 31 fired finance minister Pravin Gordhan, who had given provisional approval on a separation agreement that involves the UK lender paying its subsidiary US$983 million, and replaced him with Malusi Gigaba, one of the people said.
The bank does not know when Gigaba will formally sign-off on the transitional arrangement, one of the people said.
“This story is speculative and wrong,” a spokesman for Barclays said. A spokesman for National Treasury couldn't immediately comment when contacted by Bloomberg News.
Barclays on Feb. 23 said it had applied for permission for its stake to drop below 50% from South African bank regulators and the finance ministry.
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The sale could raise as much as US$1.5 billion based on the current share price of Barclays Africa Group Ltd., said the people, who asked not to be named because the matter is confidential.
The stock will probably be sold via an accelerated book build offering, they said. Barclays could decide to amend the size of the sale after receiving the go-ahead, the people said.
Barclays is seeking to sell down its remaining 50.1% stake in its African business to less than 20% in order to deconsolidate the unit from its accounts, releasing capital that can be invested elsewhere in the business.
Chief executive officer Jes Staley, 60, decided to reduce the lender's presence on the continent in favour of supporting a trimmed-down investment bank focused on London and New York.
The latest phase of the sell-down was delayed after South African President Jacob Zuma on March 31 fired finance minister Pravin Gordhan, who had given provisional approval on a separation agreement that involves the UK lender paying its subsidiary US$983 million, and replaced him with Malusi Gigaba, one of the people said.
The bank does not know when Gigaba will formally sign-off on the transitional arrangement, one of the people said.
“This story is speculative and wrong,” a spokesman for Barclays said. A spokesman for National Treasury couldn't immediately comment when contacted by Bloomberg News.
Barclays on Feb. 23 said it had applied for permission for its stake to drop below 50% from South African bank regulators and the finance ministry.
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