LONDON – Barclays has paid to exercise the last warrants from its controversial fundraising from Middle East investors four years ago in a move to boost the British bank's capital by 744 million pounds ($1.2 billion).
Barclays said on Wednesday it will pay 6.3 million pounds to Deutsche Bank
Deutsche and Goldman held the warrants - instruments that convert into shares - after Qatar's sovereign wealth fund locked in a profit on them in November. Qatar received the warrants as part of a fundraising by Barclays in November 2008, which meant the bank avoided taking rescue cash from the UK government.
The cashcall was controversial at the time for being too generous to Qatar and Abu Dhabi investors, and Barclays has recently come under scrutiny for its disclosures around the deal.
The last 379.2 million warrants had a gross value of 750 million pounds. Barclays said the net proceeds will boost its core Tier 1 capital ratio by 0.19 percent, adding to its 10.9 percent core ratio at the end of December.
Qatar had notched up a gain of more than 1.7 billion pounds from its investment in Barclays in November, according to Reuters estimates. It still has a 6.7 percent stake in the bank.
(Reporting by Steve Slater; Editing by Louise Heavens)