South African tumult hinders Barclays' exit from continent

Tue Apr 11, 2017 4:36pm GMT
 

By Tiisetso Motsoeneng

JOHANNESBURG (Reuters) - Barclays' plan to sell its African business and pull out of the continent are being hindered by South Africa's political upheaval and credit-rating downgrades, according to banking sources and fund managers.

The British bank gave itself 2-3 years to sell its controlling stake in Johannesburg-based Barclays Africa when it announced the plan in early 2016, and sold 12 percent last May in an "accelerated bookbuild" - a share sale held over a short period of time.

It had been planning another accelerated bookbuild in the last two weeks but pushed it back because of concerns over investor appetite due to political and economic uncertainty in South Africa, according to a banking source familiar with the plans.

The source, who asked not to be named as they are not authorised to speak publicly, did not say when the deal might now take place.

A spokesman for Barclays in London declined to comment.

South Africa has been mired in business uncertainty since late last year when the ruling African National Congress (ANC) pledged to radically transform the economy following losses in local elections that were partly caused by anger over deep inequality that persists more than two decades after apartheid.

It said it would redistribute the wealth of the country to the black majority, but has not outlined how it plans to do so.

Investor unease increased significantly two weeks ago with the sacking of respected finance minister Pravin Gordhan which led to S&P Global Ratings cutting the credit rating of South Africa and its banks to junk.   Continued...

A woman uses an ATM at a branch of Barclays South African subsidiary Absa bank in Johannesburg, in this picture taken  March 6,2016. REUTERS/Siphiwe Sibeko
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