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Barclays secures £4.5bn

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by Kay Mitchell

Britain’s third biggest bank, Barclays, has announced it has secured £4.5 billion from investors to shore up its balance sheet but ordinary shareholders only took 19% of new shares offered at 282p each.

Shares in Barclays fell a little over 2% to 284p in early trading this morning.

The majority of the shares were sold to overseas investors including a Qatari sovereign wealth fund and institutional investors such as pension funds.

It is the latest British bank to ask its shareholders for extra cash as a result of the credit crunch. Royal Bank of Scotland and Bradford & Bingley have both announced fundraising attempts to improve their balance sheets.

Royal Bank of Scotland has already raised £12 billion while Bradford & Bingley confirmed its fundraising of £400 million yesterday after two previous attempts failed.

Meanwhile, HBOS will announce on Monday if it has been successful in raising £4 billion via a rights issue.

The Qatar Investment Authority will take around 6% stake in Barclays worth £1.7 billion while a separate Qatari firm called Challenger will acquire approximately 2%. Japan’s Sumitomo Mitsui Banking is to take 2.1%.

Existing shareholders China Development Bank and Singapore-based Temasek put in enough cash to maintain their existing stakes of 3% and 2%. Temasek’s stake is now set to rise to between 2.5% and 3%. This would bring the combined stakes held by overseas investors to 15.5% – 16%.

Commenting on the fundraising, Barclays chief executive John Varley, said the bank is pleased to welcome new shareholders and looks forward to building a relationship with them.

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News posted: July 18, 2008

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