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Middle East Investor Sells Barclays Shares

The Associated Press

LONDON -- A major Middle Eastern shareholder in Barclays(BCS) bank said Tuesday that it intends to sell part of its stake, potentially taking a big profit on its seven-month investment.

Barclays turned to investors from Abu Dhabi and Qatar in November for an injection of up to 7.3 billion pounds ($12 billion) to shore up its balance sheet, rather than take on the British government as a major shareholder as Royal Bank of Scotland (RBS) and Lloyds Banking Group(LYG) did.

International Petroleum Investment Co., controlled by the royal family of Abu Dhabi, said it planned to sell 1.3 billion shares in Barclays held by its subsidiary, PCP Gulf Invest 1 Ltd.

IPIC said a second subsidiary, PCP Gulf Invest 2 Ltd., was considering the sale of its stake, but declined to specify how large it was. A third unit -- PCP Gulf Invest 3 Ltd. -- had no current intention to sell its shares.

The Abu Dhabi company invested 2 billion pounds in Barclays, but the shares currently are worth about 4 billion pounds.

Khadem Al Qubaisi, the managing director of IPIC, said the company intended to "maintain a close commercial and strategic relationship with Barclays."

"The decision to dispose of some of its interests in Barclays reflects the focus of IPIC's long-term investment strategy on hydrocarbon-related opportunities," he added.

The Abu Dhabi investments are in the form of mandatorily convertible notes and reserve capital instruments.

Alex Potter, analyst at Collins Stewart, said he "wouldn't like to second-guess what Abu Dhabi's intentions are, but that the very least it is a reflection of a very strong bounce in Barclays share price" which will yield a considerable profit.