Shareholders of Barclays PLC, Britain’s second largest bank, voted overwhelmingly in favour of a plan to raise £7bn ($10.5bn), largely from funds in the Middle East.
Barclays said over 87 percent of shareholders approved the plan, with under 13 percent voting against it.
At the vote meeting, Chairman Marcus Agius apologised to shareholders for needing to raise the money.
“We greatly regret the experience that our shareholders have had over the last 12 months,” he said. “Barclays shares have fallen a lot during that period and you have had to endure a great deal.”
The agreement will see the bank accept roughly £5.3bn from a trio of private investors from Qatar and Abu Dhabi as well as £1.7bn from other investors. The deal had been dogged with controversy since it was originally announced last month.
Two key shareholder advisory groups suggested it had no advantage over a government bailout accepted by three of Barclays’ rivals, and some existing investors were angry that they hadn’t been given the option to buy all £7bn of new shares before they were offered to Mideast investors.
However, last week Barclays appeased shareholders by portioning off £500m of preference shares off the proposed Mideast investment and offering it to institutional investors. All those shares — which pay an annual interest rate of 14 percent for 10 years — were snapped up in one day.
Top five investor Legal & General last week said it would vote in favour of the plan, even though it does not like the structure of the controversial deal, which overrode traditional shareholder pre-emption rights in favour of new investors.
Barclays’ shares closed up 9.98 percent at 146.50 pence yesterday, as uncertainty over the deal vanished and markets welcomed the news the bank would be bolstered by the cash injection.
At the meeting, with an estimated 500 investors in attendance, shareholders complained that they had little alternative but to back the fundraising or risk “dire consequences” for the bank if they didn’t.
Individual investors called on Barclays to limit directors’ pay deals at £250,000 a year and cancel executive share options. They berated the board for cancelling the annual dividend, in breach of a commitment made in the summer.
Agius said taking the “devil’s route” and shutting out the bank’s long-term owners had put Barclays in an “exquisitely awkward position”.
He acknowledged the anger felt by Barclays investors over the way the deal had been handled. He said that market conditions were so dire that the bank’s entire future could have been put at risk if it had pressed too hard for pre-emption rights to be respected.
AGENCIES & THE TIMES
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