Barclays to pay out US$2,6m bonus




Spread the love

Barclays Bank Plc will pay out a £2 million (US$2,6 million) closing bonus to Barclays Zimbabwe Limited workers as the United Kingdom-based banking group divests from the local market after 105 years, it has been established.

By Bernard Mpofu

This comes amid indications that the Reserve Bank of Zimbabwe could soon grant the greenlight to new investors taking over Barclays Zimbabwe.

Barclays Bank Plc last year announced it was disposing of its African assets, including in Zimbabwe, to focus on British and American markets. Barclays Bank Plc, which held 67,68% shareholding in the local unit, last year said it was disposing of its African assets, including in Zimbabwe, to focus on British and American markets. The remaining 32% of Barclays Bank of Zimbabwe’s shares are traded on the local bourse.

Apart from Barclays Bank Plc, major shareholders of Barclays Zimbabwe include Old Mutual Life Assurance Company (OMLAC) and FED nominees which own 3,44% and 2,45% respectively.

Barclays Zimbabwe, alongside the Egyptian business, was not part of the 2013 deal that saw Barclays Africa, formerly Absa, acquire eight African operations from its parent company due to high local political risk.

“Employees will get a five months’ salary closing bonus paid as a goodbye by Plc. This will cost the group £2 million which will obviously be taxed,” a source familiar with the developments said.

“The deal is now expected to be concluded formally in the coming month.”

Once the central bank approves the deal, FMB will buy 43% of the local unit while Barclays Plc will hold on to 10% for three years and the workers will get a 15% stake for free,” the source added.

“Soon after concluding the transaction, several board changes will be announced which will also coincide with co-branding the business to Barclays-FMB.”

After fending off 24 takeover bids to seize control of majority shareholding in Barclays Bank Zimbabwe, Malawi’s First Merchant Bank (FMB) which will be taking over the majority shareholding in Barclays Bank Zimbabwe is planning to set up a new group to be dual-listed on the Malawi Stock Exchange and Mauritius Stock Exchange as it consolidates its presence in the Southern African regional market.

Apart from the massive pay-out Barclays Plc undertook to give 15% shareholding to an employee share ownership scheme making the deal one of the biggest of its kind since government gazetted the indigenisation policy compelling foreign investors to dispose of 51% stakes to locals.

Before FMB was announced as the new majority shareholders, a bidding war had erupted between a Barclays Bank Zimbabwe senior management consortium and Malawi’s First Merchant Bank (FMB) over one of the country’s oldest and most iconic banking institutions.

Msasa Capital, a private investment and advisory firm fronted by ex-Investec executive Richard Honey and Border Timbers shareholder Heinrich von Pezold, was tasked by senior Barclays Zimbabwe management led by incumbent managing director George Guvamatanga to draft the takeover proposal to Barclays Plc.