Barclays Plc will sell 285,691,979 ordinary shares in Barclays Africa Group Ltd., representing a 33.7% stake in the African unit, up from the previously planned 22% on the back of strong investor demand.
The British lender will sell the shares in its African unit at a price of 132.0 South African rand per share, raising aggregate gross proceeds of approximately 37.71 billion rand, or £2.22 billion. Following completion of the share placing, Barclays' shareholding in Barclays Africa will drop to about 139 million ordinary shares, or a 16.4% stake, of which 12.7 million ordinary shares will be contributed to a black economic empowerment scheme in due course. Barclays will then hold an approximately 15% stake in Barclays Africa.
The share placing is expected to result in a pro forma increase of about 27 basis points to Barclays' group common equity Tier 1 ratio of 12.5% as of March 31. The transaction results in Barclays Africa's accounting deconsolidation from the group, which, it is estimated, will lead to a 73-basis-point accretion to Barclays' CET1 ratio including the increase resulting from the placing.
Completion of the placing and the accounting deconsolidation will lead to an estimated pro forma loss of £1.2 billion on Barclays' March 31 financial statements, though the actual loss will be recognized under the bank's discontinued operations in its second-quarter results. Settlement of the placing is expected to occur on a T+3 basis June 6.
Barclays will make £800 million in separation contributions, including the contribution to a black economic empowerment scheme, following execution of the two banks' separation agreements and completion of the share placing.
Barclays Bank Plc, acting through its investment bank, is acting as lead global coordinator. Citigroup Global Markets Ltd., Deutsche Bank AG's London branch and UBS Ltd. are acting as co-global coordinators. J.P. Morgan Securities Plc and Morgan Stanley & Co. International Plc are acting as joint book runners, along with the lead and co-global coordinators. BNP Paribas and Société Générale Corporate & Investment Banking are acting as co-book runners.
As of May 31, US$1 was equivalent to 13.18 South African rand.