Britains Barclays looks to Mideast to raise billions - Summary
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Published
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Fri, 31 Oct 2008 11:33
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London - Britain's Barclays bank said in London Friday it plans to raise some 7.3 billion pounds (11.8 billion dollars) in fresh capital from investors, mostly from the Middle East, thereby avoiding a cash hand-out from the British government. The investments would mostly come from state funds in the Gulf state of Qatar and the royal family of Abu Dhabi, but also from existing shareholders and institutional investors. The investors would own 32 per cent of the bank after the capital injection. Barclays said the move fulfilled the British government's strict regulations for raising capital. "We think the capital structure works well ... We have chosen a route which means we don't have to take advantage of the offer of the (British) government," Barclays chief executive John Varley said. The funds would make Barclays one of the strongest in the world. The British government's multibillion-pound bank bail-out offered capital from tax receipts in exchange for shares, in effect a part nationalization of the banks. The Royal Bank of Scotland and the merger of HBOS and Lloyds TSB have accepted 37 billion pounds in cash injections so far. Investing at least 3.5 billion pounds, Sheikh Mansour bin Zayed al- Nahyan from the Abu Dhabi royal family will control the largest part of the capital injection. The billionaire bought Britain's Manchester City football club in September. The bank said that preliminary results for the first nine months of 2008 were "slightly ahead" of the same period in 2007. Barclays was hit by a 1.2-billion-pound write-down as a result of the global financial crisis, but they were offset by "fair valuation" gains of over 1 billion pounds in October that resulted in a net loss of 129 million pounds.
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