Qatar trims Barclays bank stake

QATAR: Qatar's sovereign wealth fund said Tuesday it had trimmed its stake in British bank Barclays to about seven percent, sending the group's share price sliding.

Qatar Holding, a division of the Qatar Investment Authority, exercised warrants to buy 379.22 million ordinary shares at 197 pence from Barclays and sold them on the stock market.

The transaction, which was carried out in morning London deals, leaves their shareholding at 7.13 percent, compared with 7.40 percent previously, according to a Barclays spokesman.

The news sent Barclays' share price tumbling five percent to 362.95 pence in morning trade on the London stock market.

Barclays had last year won a seven-billion-pound capital injection largely backed by Abu Dhabi and Qatar, as it sought to survive the credit crunch without government aid. But Abu Dhabi has since sold most of its holding.

Qatar Holding chief executive Ahmad Al-Sayed said Tuesday's move did not affect Qatar's long-term strategy as Barclays' biggest shareholder.

"The decision to exercise the warrants and dispose of the resultant shares forms part of Qatar Holding's portfolio management program and does not impact on our current intention to remain a long term strategic shareholder in Barclays.

"The transaction will result in proceeds for Barclays of approximately 750 million pounds (822 million euros, 1.23 billion dollars)."

Barclays chief executive John Varley meanwhile added that the move would broaden the group's shareholder base.

"We are happy to be working with Qatar Holding on a placing derived from the exercise of some 50 percent of its warrants," Varley said in a separate statement.

"The effect will be further to broaden the base of our share register. Qatar Holding is our largest shareholder and a key partner of the Barclays Group."

The company's share price has soared in recent months because the bank successfully steered a path through the global financial crisis with the help of massive investment from oil-rich investors Abu Dhabi and Qatar.