The Co-operative bank still owns a 30 per cent stake, making it the largest single shareholder in the bank, following yesterday’s confirmation that it was forced to revise its recapitalisation plans.
In reaching that agreement, Euan Sutherland, group chief executive, pointed out he had not turned to the taxpayer to bail out the bank and that his organisation remained in control with a 30 per cent stake - making it the largest shareholder.
He said: “This is the first bank to be rescued - and to survive as a standalone entity - without taxpayer money.
“As a group the Co-operative retains effective control of the bank, which I am delighted to say that we have as we are the single largest shareholder.
“This has been a hugely difficult time... Over coming days will announce more details.”
Mr Sutherland’s comments come after yesterday (21 October) Co-operative Bank suspended a number of listed corporate bonds and confirmed it was forced to revise its recapitalisation plans.
According to a statement on the London Stock Exchange, the bank requested the suspension following the announcement by The Co-Operative Group Limited that it could have to alter its plans to recapitalise the beleagured bank.
The bank stated it was “engaging with different bondholder constituencies and seeking to balance the requirements and expectations of these parties”.
The statement added many elements of the beleaguered bank’s recapitalisation plan would be “materially different” to an original outline in June designed to raise £500m towards the bank’s capital shortfall of £1.5bn, by swapping retail bond holdings into shares in a restructured bank.
The original proposals would have seen the Co-Operative Group contribute £1bn to the recapitalisation plans in return for a 70 per cent stake in the bank.
Reports have claimed that resistance of US-based hedge funds to the recapitalisation has prevailed, with the Co-op now having to reconsider how it will meet the £1.5bn capital shortfall and being likely to be forced to cede a shareholding of more than 50 per cent.