Lender agrees £157.5m property sale
THE Co-op Bank has agreed the £157.5m sale of a residential property portfolio it inherited from the Britannia Building Society.
It is selling Illius Properties Ltd, which holds more than 1,000 repossessed homes, to Salmon Real Estate.
Illius became part of the Co-op Bank following its merger with Britannia in 2009. Bad debts at the building society were blamed for last year’s crisis at the bank which left it with a £1.5bn shortfall.
A rescue package involved a cash injection from the Co-op Group and a debt for equity deal with bond holders which saw the group lose all but 30% of the shares
The Illius sale is in line with the bank’s previously stated strategy to dispose of its non-core assets.
The Co-operative Bank said in a statement: “The disposal of Illius is in line with the bank’s previously stated strategy to dispose of its non-core assets. The equity consideration will be used by the bank for general corporate purposes. Illius was loss making and the disposal was broadly neutral from a profit and loss perspective.”
The consideration is comprised of: a payment by Salmon to the bank of £9.8m in cash in respect of the purchase of the shares of Illius and also Salmon repaying to the bank in cash upon completion an inter-company loan of £147.16m owed by Illius to the Co-op Bank.
