Barclays moved to quell anger among its shareholders today, offering them a slice of a £5.8 billion ($8.65 billion) capital injection by Middle Eastern investors.
The bank also said no bonuses would be paid to executive directors for 2008 and confirmed an earlier Reuters report that all board members would offer themselves for re-election at the company's annual general meeting in April 2009.
Barclays said Qatar Holding LLC and Sheikh Mansour Bin Zayed Al Nahyan would each make up to £250 million ($373 million) of reserve capital instruments available to existing shareholders in the bank in a bookbuilding process today.
"A number of meetings and conversations have taken place between senior officers of Barclays and Barclays major institutional shareholders," the bank said in a statement.
"The discussions have been constructive and the board of Barclays has listened carefully to shareholders' views." Shares in the bank were up 3.4 per cent at 159.3 pence by 8.08am, outperforming a 0.3 per cent weaker FTSE 100.
Barclays, which has opted to raise fresh capital from private investors rather than subscribe to a government bailout of Britain's banks, is planning to raise £7 billion pounds, including £5.8 billion from investors in Abu Dhabi and Qatar.
Existing shareholders are angry, however, that the terms on offer to the Middle Eastern investors, including a 14 per cent interest rate, are better than those available to them.
Barclays is seeking to maintain its commercial freedom by not resorting to state funds but critics also say it would have been cheaper to make use of the government bailout.
The bank said Barclays Capital was acting as the sole bookrunner in placing the reserve capital instruments with institutional shareholders while Credit Suisse and JP Morgan Cazenove were acting as co-managers.
Reuters