Middle Eastern investors could receive Barclay's Bank bonus
It has been revealed that when Barclays bank announced a multibillion pound fundraising from Middle Eastern investors last year there were a number of protection clause written into the contract. It now appears that under the terms of a specific clause, the Middle Eastern investors could see their stakes increase at no cost if Barclays bank was to raise more capital before June 2009. This is the first time such an agreement has been discussed in public much to the dismay of shareholders.
Yet again there is a general feeling in the city that Barclays bank should have taken advantage of the government's taxpayer led rescue package towards the end of 2008. The cost of the capital was much less than the Middle Eastern investors and there were no such protection clauses written into the deal. Many analysts are starting to doubt the actions of the Barclay's Bank board and the fact that if the government was to inject more capital, or the company was to announce a new fundraising, ordinary shareholders will again be disadvantaged.
While there is a need to work on the stability of Barclays bank at the moment it would appear that institutional investors are not happy with the terms of the Middle Eastern agreement and heads may roll in due course.
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