Abu Dhabi investor to sell Barclay's stake with windfall profits

02 June 2009

Sheikh Mansour bin Zayed al-Nahyan, member of the Abu Dhabi ruling family, is selling his holding of more than 1.3 billion shares of Barclays, which is expected to  yield a whopping profit of 70 per cent or more than £3.5 billion on an investment of £2 billion in just seven months.

The investment made through PCP Gulf Invest 1 Ltd., a subsidiary of Abu Dhabi-based International Petroleum Investment Company, has hired Credit Suisse Group AG to sell mandatory convertible notes amounting to 1.3 billion in shares of Barclays.

The Canary Wharf, London-based bank said in a statement, ''Barclays notes the announcement by International Petroleum Investment Company (IPIC) of its intention to dispose of 1,304,835,721 Barclays shares for which its entire holding of Mandatorily Convertible Notes (MCNs) are exchangeable. IPIC continues to hold warrants exercisable into a further 758,437,618 Barclays shares at a price of 197.775 pence per share."

IPIC's investment of £2 billion in the MCNs, which convert into Barclays shares at 153 pence, has doubled in the seven months to 316.25 pence as on the closing price of Barclays last night.

This was in sharp contrast to January 2009, when Barclay's shares had nosedived to around 50 pence. Sheikh Mansour's investment is now seen as an astute speculative move, the same that he had made earlier when he acquired England's leading football club, Manchester City football club.

Since February, the stock price of Barclays had staged a remarkable recovery and soared on the back of heightened activity in the capital markets. Many in the UK are seeing the Abu Dhabi investor as a person who is booking his profits and moving on although IPIC still holds warrants over Barclay's shares with a conversion price of 198 pence.