Co-op Group's grip on bank loosens in latest fundraisingFriday 09 May 2014 08.41
Britain's Co-operative Group will cede more control of the Co-op Bank following the bank's latest fundraising, with its stake expected to fall to 20%, two sources familiar with the matter told Reuters.
Co-op Bank today confirmed that it would raise £400m of extra capital through the issue of new shares to cover the cost of past misconduct.
The bank said in March that it needed to raise the funds tocover the cost of past misconduct.
The latest capital raise comes on top of last year's £1.5 billion recapitalisation,which saw the Co-operative Group lose control of the bank to bondholders including US hedge funds.
Co-op Group said its shareholding would be reduced from its current 30% following the capital raise but that it expected to remain the bank's biggest single shareholder.
Co-op Bank said today that its four other biggest shareholders had committed to take up 31% of the newshares.
"We have the support of our five largest shareholders for this transaction," the company's chief executive Niall Booker said.
Two of those shareholders - Silver Point and Perry Capital -have been granted the right to nominate a director to the board of the bank for as long as they hold a stake of at least 5%.
Co-op Bank also said that Chairman Richard Pym would step down from his role by the end of the year.