Following the completion of South Africa’s largest bookbuild in South African rand, Barclays PLC has sold 33.7% of Barclays Africa’s issued share capital at a price of R132 per share.

This results in accounting deconsolidation of Barclays Africa from Barclays PLC.

Barclays sold 285,691,979 Barclays Africa ordinary shares at a price of R132 per share, which results in Barclays reducing its shareholding to 23.4%, with a further 7% to be taken up by the Public Investment Corporation (PIC) at a later date, following receipt of the necessary regulatory approvals.

The shares in the overnight bookbuild were multiple-times subscribed and sold to a mix of existing and new investors, both locally and internationally.

The aggregate gross sale proceeds were approximately R37.7bn.

“The completion of this transaction demonstrates an exceptionally healthy investor appetite for Barclays Africa and our strategy of becoming a leading standalone financial services group in Africa,” said Maria Ramos, Barclays Africa Group CEO.

Barclays is no longer the controlling shareholder of Barclays Africa, which now has a diverse shareholder portfolio made up of very supportive, long-term, institutional and individual investors.

Barclays will remain an important shareholder and will support Barclays Africa throughout the sell-down and operational separation processes, which are already well underway. 

Barclays and Barclays Africa will continue to work with regulators to ensure that the sell-down and separation are managed appropriately, with no unnecessary impact to stakeholders or the business.

According to Ramos, independence from Barclays will create several opportunities, which will ultimately result in benefits for different stakeholders.

“This is a very exciting time for Barclays Africa. There is an opportunity for increased African ownership of our business through a planned staff share scheme as well as a broad-based black empowerment scheme that will contribute to the growth of an entrepreneurial culture,” she said. 

Barclays will contribute the equivalent of 1.5% of Barclays Africa’s market capitalisation, equating to approximately R1.85bn (based on Barclays Africa’s share price of R145.95 as at 30 May 2017), towards the establishment of a broad-based black economic empowerment scheme. 

As announced in February 2017, Barclays has agreed to contribute approximately R12bn primarily to fund the investments required for Barclays Africa to complete the separation from Barclays PLC. 

The contribution will, in part, go towards investments in technology, rebranding and other separation projects. 

This process presents an opportunity to modernise and harmonise systems across Barclays Africa operations.

Ownership of Barclays and Absa operations in Africa does not change as a result of the reduction in shareholding. 

Barclays announced on March 1, 2016 that it intended reducing its 62.3% shareholding in Barclays Africa over time because of regulatory changes in the UK.  

On May 5, 2016, Barclays Bank sold 103.6 million shares in Barclays Africa in a bookbuild, reducing its shareholding to 50.1%.

Ramos said: “This is a defining moment for Barclays Africa. We now have a significant opportunity to determine our own destiny and make our own decisions on what is right for a pan-African focused business.”