Barclays’ Absa CEO Sets September Deadline for Asset Transfer
Maria Ramos, chief executive officer of Absa Group Ltd. (ASA), the South African bank buying most of Barclays Plc (BARC)’s African assets, said it expects to complete the deal by September after regulatory delays.
Kenya, Botswana, Ghana and Mauritius still need to approve the transaction, she said yesterday in an interview.
“We’re still hoping that the deal will conclude in the first half of the year, but it’s a stretch,” Ramos said in Johannesburg. “We’re still confident we will conclude in the timelines allowed by the sales and purchase agreement, which is 90 days after June 6.”
Barclays and Absa said on April 5 that the deal, which involves the South African bank offering 18.3 billion rand ($2.05 billion) in shares for the bulk of Barclays’ African operations, was delayed, without specifying a time frame. The British bank, which first bought an Absa stake in 2005, will see its holding increase to 62.3 percent from 55.5 percent with Absa initially scheduled to change its name to Barclays Africa Group Ltd. on Johannesburg’s stock exchange by April 15.
“I was always aware that taking on eight countries wasn’t going to be a walk in the park,” she said.
Right to Terminate
According to a circular dated Dec. 14, both banks had the right to extend the transaction’s completion date by 90 days. The document also says if any of Barclays’s assets in Seychelles, Tanzania, Uganda and Zambia are not transferred by the time the deal is ready to conclude, they may still be transferred at a later date. Alternatively, if the deadlines set are not met, both banks have the right to terminate the agreement, according to the circular.
Barclays has surged 21 percent since the transaction was announced and is the second best-performing stock on the six- member FTSE 350 Banks Index this year. Absa fell 5.8 percent this year, the most of South Africa’s four largest banks as profit dropped.
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