Qatar Holding LLC has cashed in on its remaining warrants in Britain's Barclays Plc (BARC.L), a move that still leaves the sovereign wealth fund as the bank's top shareholder while their relationship faces legal scrutiny.
Qatar Holding said in a statement on Sunday it had monetized the remaining holding of 379 million units of Barclays warrants -- instruments that convert into shares -- as part of its active portfolio management, without affecting its 6.65 percent stake.
In a separate statement on Sunday, Deutsche Bank AG (DBKGn.DE) and Goldman Sachs Group Inc (GS.N) said they would sell up to 303.3 million Barclays ordinary shares in relation to the monetization of the warrants by Qatar.
The conversion price for the warrants was not disclosed in the statements. At Friday's closing share price, the 303.3 million shares being sold would have a total market value of 771 million pounds ($1.24 billion).
"We remain a supportive strategic investor in Barclays, and maintain our confidence in the long-term prospects for the business," Qatar Holding CEO Ahmad Al-Sayed said in the statement.
Qatar had 813.96 million ordinary shares in Barclays as of October 31, making it the bank's largest single shareholder, according to Thomson Reuters data.
Barclays continues to be a long term strategic investment for Qatar Holding and an important commercial partner, the sovereign wealth fund said.
"Barclays welcomes Qatar Holding's message of confidence in its long term prospects and continues to appreciate the consistent support it has received since Qatar Holding became its largest shareholder," Barclays CEO Antony Jenkins said in one of the statements.
An accelerated bookbuild offering to institutional investors will commence immediately and will be managed by Deutsche Bank and Goldman Sachs International as joint bookrunners, the two banks said.
Barclays is facing a series of investigations into its business, including one by Britain's Serious Fraud Office (SFO) and Financial Services Authority (FSA), which are scrutinizing payments made by Barclays to Qatar as part of a 2008 fundraising.
Barclays disclosed the FSA investigation when it released half-year results on July 27. It relates to fees paid to Qatar on deals in June and November 2008, when Barclays raised 11.5 billion pounds, avoiding selling shares to the British government.
The SFO is investigating "payments under certain commercial agreements" between Barclays and Qatar, the bank said on August 29.
Qatar Holding received Barclays warrants as part of the 2008 fundraising. Officials from Qatar Holding and Barclays could not immediately be reached to comment on whether the warrants referred to in Sunday's statement originated in that 2008 fundraising.
In October 2009, Qatar sold a 1.4 billion pound stake in Barclays after converting warrants it had obtained in the 2008 fundraising into shares. It sold 379.2 million shares after exercising warrants at a price of 197.775 pence.
Barclays at the time was to receive 750 million pounds from the conversion of the warrants.
The bank has recently come under scrutiny regarding manipulation of benchmark interest rate Libor and could face fines over an investigation into the manipulation of power prices the United States.
(Reporting by Greg Roumeliotis in New York; Editing by Richard Pullin and Muralikumar Anantharaman)