Britain's Co-operative Bank and its parent Co-operative Group successfully completes raising £1 billion for its rescue plan
Britain's Co-operative Bank had raised £1 billion ($1.6 billion) from the restructuring of its debt and ownership structure. This is the cornerstone of a £1.5 billion recapitalization due to complete next year.
Reuters, citing a joint statement by Co-op Bank and its parent Co-operative Group, said that the so-called liability management exercise was successfully completed on Friday.
Co-op Bank plans to top that up with £333 million contributed from Co-op Group, £125 million from its bondholders and £40 million of interest savings to reach its £1.5 billion target, the report said.
Under the scheme, Co-op Group has ceded control of its trouble banking arm to hedge funds and other bondholders. The British consumer cooperative's ownership of the bank was reduced to a 30% stake from a 100% stake, Reuters said.
The Co-op Group has been rocked this year by a capital shortfall in its bank and the arrest of former bank chairman Paul Flowers as part of an investigation into the supply of illegal drugs. The cooperative's businesses include food shops and funeral services, the report said.