Barclays plc and Barclays Africa agree separation terms
The agreement is expected to unlock opportunities for Barclays Africa as an independent pan African bank.
UK-based Barclays plc announced on March 1, 2016 that it intends to sell the majority of its shareholding in Barclays Africa over a period of two to three years.
The agreement provides for contributions by Barclays plc totalling GBP765 million (R12.8 billion based on December 31, 2016 exchange rate) primarily to fund the investments required for Barclays Africa Group to separate from Barclays plc as follows:
- £515 million (R8.6 billion) for investments required in technology, rebranding and other separation projects;
- £55 million (R0.9 billion) to cover separation related expenses, of which £27.5 million was received in December 2016; and
- £195 million (R3.3 billion) to terminate the existing service level agreement between Barclays and BAGL, relating to the Rest of Africa operations acquired in 2013.
The expectation is that the financial contributions will neutralise the capital and cash flow impact of separation investments on the Group over time. ■