Barclays’ shareholders said to be outraged at Middle Eastern fund raising
Last week, Barclays announced it was looking to raise £7.3 billion, primarily from Middle East investors.
The bank has secured a £5.8 billion cash injection from investors in Qatar and Abu Dhabi.
Sheikh Mansour Bin Zayed Al Nahyan, a member of Abu Dhabi’s Royal Family, is investing up to £3.5 billion in the bank, while £2 billion is to be invested from Qatar Holdings and £300 million from Challenger, managed by Qatar’s Royal Family.
Furthermore, the bank is looking to raise a further £1.5 billion from existing institutional investors such as pension funds.
However, according to reports, Barclays’ investors are said to be infuriated at the generous terms offered to overseas investors. The Association of British Insurers has been asked to get involved in order to negotiate a better deal.
Unlike other British banks, Barclays has declined financial assistance from the UK Government and the terms that are attached to it.
However, Barclays has been criticised for protecting executive bonuses at the cost of shareholders and, according to analysts, the £5.8 billion raised will cost more than if the bank had opted for the Government’s bailout package.
Following the news last week, shares in Barclays fell 13% as investors digested the deal.
With regard to the rescue package, the UK Government is to pump £37 billion into three of the country’s largest banks.
The Government is to inject £20 billion into RBS while a further £17 billion will be pumped into Lloyds TSB and HBOS.
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