Barclays looks to raise £4.5bn
Barclays today announced a £4.5 billion share issue to shore up its balance sheet.
In a bid to "strengthen its capital base", the bank is to issue 1.576 billion new ordinary shares to raise the cash.
A statement from the bank said the share issue would "enable Barclays to strengthen its capital base and operate capital ratios that are ahead of its targets; and provide additional financial resources to allow Barclays to capture opportunities for growth."
The issue will also allow the introduction of new investors; including sovereign wealth fund Qatar Investment Authority and Sumitomo Mitsui Banking Corporation, along with letting existing shareholders China Development Bank and Singapore-based investment firm Temasek Holdings boost their stakes.
Under the plans, three new shares will be available for every 14 existing shares with the majority offered at a 9.3 per cent discount on the closing price yesterday - 282p.
Qatar Investment Authority and Challenger, which represents the chairman of Qatar Holding, Sheikh Hamad bin Jassim bin Jabr Al-Thani, will invest £1.7 billion and £533 million.
Meanwhile, China Development Bank will invest £136 million and Temasek will provide up to £200 million - ensuring they remain among Barclays' largest shareholders.
John Varley, group chief executive of Barclays, said: "Through our capital raising today, we strengthen our capital base and give ourselves additional resources to pursue our strategy of growth through earnings diversification.
"We position ourselves to capture opportunities for new business at attractive margins in our retail and commercial banking businesses and in investment banking and investment management."
He added that, with profits in May ahead of the monthly run rate for last year, the bank intended to maintain its interim dividend level for 2008.
In response, the Barclay share price was up four per cent in the first hour of trading to 323.25p.
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