Final group of bondholders back Co-op rescue deal

THE Co-op Group said today the final category of bondholders had approved the £1.5bn rescue plan for the Co-op Bank.

Some 99.8% of dated note holders voted in favour. Holders of other bonds have already approved the scheme which will see them receive shares in the bank when it floats on the stock market.

In a statement the group said: “Successful completion of the liability management exercise is now only dependent upon the scheme being sanctioned by the court at the hearing scheduled for December 18.”

The group previously warned that the bank could go into “resolution”, effectively taken over by the Bank of England, if the plan was not backed.

In October the Co-op Group admitted it had been forced to agree a debt for equity swap with large bondholders that will leave it with 30% of the bank when it floats on the stock market.

Large bondholders, who are backing the deal, have agreed to put in £125m of new capital alongside £462m from the Co-op Group.

Smaller retail investors have been given an option of a lower annual payment in exchange for a future lump sum, or maintaining existing annual payments for 12 years without future capital.