Barclays’ shares drop sharply effected by Abu Dhabi's selling its stocks

As it became known today, Barclays’ shares plunged by 13% after Abu Dhabi's International Petroleum investment Co. announced about its intention to sell 1.3 billion shares in the bank, worth around 4.1 billion pounds ($6.7 billion) at the previous day's closing price.

The stock is still trading at less than half the price it reached before the credit crisis began, but it has rebounded in the last few months and is up more than 50% since the bank announced its capital raising plans at the end of October. 

IPIC bought Barclays’ mandatory convertible notes from last year when the bank raised funds from private investors, rather than go to the British government for aid as rivals Royal Bank of Scotland and Lloyds Banking Group have done. According to the IPIC’s report, It hired Credit Suisse to dispose of the ordinary shares for which the notes are exchangeable through a so-called accelerated bookbuild, which is due to close on Wednesday. A subsidiary of IPIC is also considering selling 1.25 billion pounds of reserve capital instruments in Barclays. 

The sale will let the IPIC still holding warrants exercisable into a further 758 million shares, which it doesn’t want to exercise or sell currently.