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Barclays shareholders 'retain grave concerns over capital deal'

Barclays' efforts to smooth investor relations ahead of a vote on its £7 billion capital raising program appear to be floundering after the Association of British Insurers' (ABI) Institutional Voting Service issued a "red top" listing warning of "grave concern" about the deal.

Yesterday (November 18th), the high street bank announced that after discussions with institutional shareholders and its new backers, £500 million worth of reserve capital instruments will be made available to investors who did not get a chance to participate in the capital raising issue.

Bonuses will also be suspended for executive directors and the bank's board will all stand for re-election in April.

Despite these moves, the ABI said shareholders remain unhappy about Barclays' "serious breach" of pre-emption rights, which would have given existing backers first refusal on any new shares.

The red top listing does not constitute advice to vote against the capital raising plan.

According to the Guardian, shareholders may be forced to back the plan even if they oppose it, as the alternative is a state-sponsored bailout.

Barclays needs 75 per cent of shareholders to vote for the capital raising when they meet on November 24th.