Exclusive: South African
pension fund seeks central bank approval to increase
Barclays Africa stake: sources
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[November 07, 2016]
By Tiisetso Motsoeneng
JOHANNESBURG
(Reuters) - Africa's biggest pension fund, Public Investment
Corporation, has sought approval from South Africa's central bank to
raise its stake in Barclays Africa, two sources with direct knowledge of
the matter said.
Barclays Africa's parent, Barclays Plc <BARC.L>, wants to reduce its
holding to below 20 percent, which would make it an equity investment
rather than a subsidiary. The plan is part of a broader sale by the
British bank of its African assets as it shifts to focus on the United
States and Britain.
Public Investment Corporation (PIC), the second-biggest shareholder in
Barclays Africa with a holding of about 7 percent, could buy at least an
additional 31 percent stake, the sources indicated. They would not
elaborate on the exact stake size or the timing or logistics of the
purchase.
Under South African regulations PIC requires the central bank's approval
to raise its stake in Barclays Africa.
"PIC has always looked at Barclays Plc's retreat as an opportunity to
create a black-owned bank, but there aren't many people with deep
pockets to make that happen," one of the sources said.
"But PIC on its own can buy to a level where Barclays will be able to
deconsolidate it and has approached the Reserve Bank for ways to go
about it."
Barclays Plc trimmed its interest in its African unit to 50 percent,
from 62 percent, in May.
The British bank wants to reduce its holding in the African unit to an
equity investment because under its current ownership it has to fully
allocate capital to the business but gets less than two-thirds of its
profits.
PIC manages about $130 billion of South African government employee
pension assets.
Another source said PIC was also open to teaming up with an
international investor - who would be prepared to meet government quotas
on black ownership - to line up cash for Barclays Plc's remaining 50
percent stake, which is worth around $4 billion at current prices.
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A Barclays logo is pictured outside the Barclays towers in
Johannesburg December 16, 2015. REUTERS/Siphiwe Sibeko
The South African Reserve Bank's spokesman Jabulani Sikhakhane declined
to comment.
The central bank has already said it would not look kindly on a private
equity company investing in any South African bank as it favors
long-term strategic investors.
PIC was the biggest investor when Barclays Plc sold a 12.2 percent stake
in the African unit in May, taking one-tenth of the shares sold, or an
additional 1.2 percent holding.
PIC is not the only investor looking at the British bank's sale of part
of its interest in Barclays Africa, which vies for market share with
Standard Bank, Nedbank and FirstRand across the continent.
Sources with knowledge of the matter told Reuters in September that
former Barclays Plc chief Bob Diamond was still looking to acquire the
remaining 50 percent via his investment vehicle Atlas Merchant Capital.
As well as trying to find a buyer for the Africa business, Barclays
retains the option to sell its shares in Barclays Africa in chunks via a
so-called accelerated book build, or in the open market via the
Johannesburg stock exchange.
($1 = 13.8542 rand)
(Editing by Susan Fenton)
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