Page last updated at 14:25 GMT, Friday, 18 July 2008 15:25 UK

Barclays share sale raises 4.5bn

Barclays bank branch
Barclays has successfully courted foreign investors

Barclays has secured 4.5bn from investors to bolster its balance sheet, but ordinary shareholders opted to buy only a fifth of the stock on offer.

The bulk of shares were sold to major overseas and institutional investors, led by Qatar, China and Singapore.

Barclays is the latest British bank to seek to raise money to ease the impact of the credit crunch.

HBOS will find out later whether its shareholders have backed a plan to raise 4bn to shore up its finances.

Ordinary shareholders took up 19% of the 1.6 billion new shares Barclays offered at 282 pence each.

Weak bank shares

Barclays shares have been trading below that level in recent weeks but the stock closed up 9.7%.

MAJOR FOREIGN INVESTORS
Qatari Investment Authority 6%
Challenger 2%
Sumitomo 2.1%
China Development Bank 3%
Temasek 2.5-3%
Source: Barclays (approximate figures)

The bulk of the newly-issued shares has gone to a group of investors assembled by Barclays including sovereign wealth funds and institutional investors such as pension funds.

Under the terms of the deal, the number of shares bought by those investors was dependent on the take-up by existing shareholders.

Banking shares have plunged in the past year and many smaller investors are wary of the sector.

British banks are tapping their shareholders for extra cash to improve their financial position as credit markets remain unstable and earnings from key activities, such as mortgage lending and investment banking, come under strain.

RBS has already raised 12bn, HBOS is looking to raise 4bn and Bradford & Bingley is hoping to secure 400m.

Barclays said it would also use the extra cash to "pursue opportunities to capture growth".

Foreign investors

The Qatar Investment Authority will take a roughly 6% stake in the bank worth 1.7bn and a separate Qatari firm called Challenger will take about 2%. Japan's Sumitomo Mitsui Banking will take 2.1%.

Existing shareholders China Development Bank and Singapore government-controlled fund Temasek have also bought shares.

Barclays has led the way in courting foreign investors.

The Qatari Investment Authority already has significant interests in the UK, in effect controlling about 25% of shares in supermarket chain Sainsbury's.




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