Co-op bondholders back bank’s recapitalisation plans

Co-operative Bank’s bondholders have overwhelmingly approved plans for the £1.5bn recapitalisation of the bank.

A statement released by the troubled lender on Friday said 99.9 per cent of bondholders had approved the plan, which will see £1bn injected into the bank by the end of the year.

Voting took place last month but the proposals still need to be approved at a bondholders’ meeting on 11 December.

A joint statement from Co-operative Group and Co-operative banks says: “We are now highly confident that our £1.5bn recapitalisation plan for The Co-operative Bank can be achieved.”

Mark Taber, which represents an action group of Co-op Bank retail investors, says: “All the hard work since the offer was announced on 4 November has paid off and this should secure the best outcome for retail investors under the circumstances and is a big step towards stabilising and securing a successful future for Co-op Bank under its new management and ownership and governance structures.”

The plans will see Co-operative Group lose control of the bank and retain just a 30 per cent stake. Institutional investors will take control of the rest of the bank after they are asked to swap their bonds for shares in the lender.

Retail investors will be issued new bonds which will have a lower rate of return and will not be permanent, whereas they are at present.