Sutherland hails "step forward" in Co-op bank rescue plan
THE Co-operative Group has hailed a “major step forward” in its turnaround for its banking arm, after bondholders agreed to take shares in the lender.
Late on Friday, the Manchester-based mutual said the key part of its £1.5bn rescue plan had been agreed. This will see £1bn of bonds exchanged for new shares in the bank, which will be listed on the stock market in the next 12 months.
The remaining £500m will come from the Co-operative Group, which will remain the main shareholder in the bank with a 30% stake.
Co-op Group chief executive Euan Sutherland said: “Today we have taken a major step forward in securing the future of the Co-operative Bank, with the support of our investors.”
Richard Pym, chairman of the Co-operative Bank, said: “With our balance sheet strengthened, I and the rest of the board will be working with our rejuvenated management team to ensure that we continue to provide customers with an alternative choice to the traditional banks.
“Importantly, The Co-operative Bank’s ethics and values will be protected, both in the bank’s constitution and via an independent ethics committee.”
The bank said it would seek to list new shares on the Stock Exchange within a year.
The bank and the group was plunged into crisis after a black hole in the Co-op Bank’s finances emerged this summer after its purchase of the Britannia Building Society and abortive attempts to buy 632 Lloyds Bank branches.
