Co-op Bank to consider bailout alternatives
THE Co-operative Bank has formed a committee to consider alternatives to its £1.5bn rescue plan.
In June the bank outlined a strategy to raise the money from asset sales, bank loans and by reducing the value of bonds.
Last month it stressed there was no “plan B” and failure to back the proposal would lead to the bank’s nationalisation.
But some bondholders have indicated they may block the Co-op’s proposal and have put forward a debt for equity proposal that would give them a majority stake.
On Friday the bank said it had set up the committee “to consider third-party approaches in relation to the group’s recapitalisation plan”.
It will include the bank’s non-executive chairman Richard Pym, chief executive Niall Booker, and the independent non-executive directors. As part of this process Mr Booker has stepped aside from his duties as deputy chief executive of The Co-operative Group.
Earlier on Friday the bank announced the departure of deputy chief executive Rod Bulmer, who was placed in temporary charge as the capital crisis unfolded. Mr Bulmer, who has been with the bank since 2007, stepped up after the departure of Barry Tootell in May after the bank’s credit rating was downgraded to ‘junk status’ weeks after the collapse of the Project Verde deal to buy more than 600 branches from Lloyds.
