Barclays PLC hopes to raise £4.5 billion (US$8.85 billion) through a share issue that will draw in new investment from Qatar and Japan, the company said yesterday.
The company said the cash would bolster its financial position and give it the opportunity to capitalize on the current disruption in financial markets.
Barclays is the third big British bank to go to its shareholders to shore up its financial position. Royal Bank of Scotland recently raised £12 billion in Europe’s biggest-ever rights issue, and HBOS PLC has announced a £4 billion rights issue.
Barclays, Britain’s third-largest bank, said its plan would bring in new investment from Sumitomo Mitsui Banking Corp, the Qatar Investment Authority and Challenger, a company representing Sheikh Hamad Bin Jassim Bin Jabr al-Thani, the chairman of Qatar Holding, and his family.
Existing shareholders will be offered three open offer shares at £2.82 each for every 14 shares now held.
Barclays shares were up 5.2 percent at £3.27 in early trading on the London Stock Exchange.
Current strains in the financial system have created opportunities, including pricing changes in many asset classes and reduced competition, Barclays said in a statement.
“Significant opportunities therefore exist to attract flows of new business at expanded margins consistent with Barclays’ strategy to seek higher growth over time by diversifying its profits base,” it said.
The company said it intends to expand its presence in Asia, the Middle East, Africa and Europe, and step up growth in Russia, Pakistan and other new markets. It also intends to expand its investment banking activity, particularly in Asia and the US.
Qatar Investment Authority and Challenger have agreed to invest up to £1.76 billion and £533 million respectively, it said.
Sumitomo Mitsui has agreed to invest £500 million; China Development Bank up to £136 million; and Temasek Holdings, based in Singapore, up to £200 million.
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