Qatar Holding cashes Barclays warrants worth $1.2 billion

Qatar Holding cashes Barclays warrants worth $1.2 billion

Qatar Holding, an investment arm of the wealthy Gulf state, said Monday it has cashed its remaining holding of Barclays warrants, in a deal that has led to a $1.2 billion share sale in the British bank.

 

The warrants, which convert into shares, were sold to Deutsche Bank AG and Goldman Sachs Group Inc. The sovereign wealth fund said it has “monetised its remaining holding of 379 million units of Barclays Plc warrants as part of its active portfolio management,” according to a statement. “QH’s investment in Barclays ordinary shares is unaffected by this transaction,” remaining the largest single investor with an “unchanged 6.65 percent” stake, it said.

 

The fund bought the warrants, which give investors the right to buy shares at an agreed price in the future, in 2008, when it acquired a large stake as part of a cash injection package for the bank to survive the credit crunch. “We remain a supportive strategic investor in Barclays, and maintain our confidence in the long term prospects for the business,” said Qatar Holding chief executive officer Ahmad al-Sayed in the statement. The statement also said that Barclays welcomed the “message of confidence.”

 

“Barclays welcomes Qatar Holding’s message of confidence in its long term prospects and continues to appreciate the consistent support it has received since Qatar Holding became its largest shareholder,” said Barclays chief executive officer Antony Jenkins. “Qatar Holding have exercised their warrants into stock — long-term option contracts — in Barclays, which they got their hands on at the height of the banking crisis, and offloaded the stock,” said TJ Markets analyst Manoj Ladwa. “They still remain holders of their core position and seem to be taking a significant profit out of the trade,” he said.

 

In 2009, Qatar Holding exercised warrants to buy 379.22 million ordinary shares at 197 pence from Barclays and sold them on the stock market. The news then sent Barclays shares tumbling.

 

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