Abu Dhabi 'eyes $16bn investment in RBS'
London, March 28, 2012
Abu Dhabi investors have discussed a 10 billion pound ($15.97 billion) investment into Royal Bank of Scotland, the Financial Times reported on Wednesday. The oil-rich emirate's sovereign wealth funds are not involved in talks at this stage, reports said.
The newspaper cited people close to the discussions as saying talks have taken place over the course of the last three years into a potential investment in two of Britain's two big part-nationalised banks, RBS and Lloyds.
Reuters reported on Tuesday that the RBS talks are being held at the level of the Abu Dhabi ruling family and it could end up with a stake of more than a third in RBS.
Abu Dhabi investors could invest up to 5 billion pounds in RBS stock - potentially equivalent to a 14 percent equity stake, the FT said.
The remainder would be injected as contingent capital, funds that would be available under pre-negotiated agreement, which could convert from debt to equity on a pre-agreed basis, the FT said.
People familiar with the talks, cited by the FT, said a deal was more likely in 2013. Neither RBS nor Lloyd's could be reached immediately for comment.
An earlier Reuters report quoted a source familiar with the matter as saying that Amanda Staveley, a businesswoman notable for her Middle Eastern connections, was advising the emirate's rulers.
"The talks have been going on for six months, and nothing is likely to materialise for the next few months," the source said, adding that Abu Dhabi could end up with a stake of more than a third, though it has not decided which of its entities would hold the stake.
Staveley played a prominent role in Abu Dhabi royal Sheikh Mansour bin Zayed al-Nahayan's 2008 investment in another British bank, Barclays.
"It's happening higher up," the banker said, adding that a deal could fall apart on price grounds. Two other banking sources also said that a deal, if it happened, would be struck at a government-to-government level.
"Abu Dhabi is always talking to parties to invest, including RBS. Whether it will materialise or not is too early to say," a source close to the royal family said on condition of anonymity.
A stake buy by Abu Dhabi would be the first move on a large financial asset by Gulf investors since the 2008 financial crisis, when regional royals and sovereign funds bought into Citigroup, Credit Suisse and Barclays. - Reuters