Co-Op Bank finalises £700m rescue plan

The £700m will consist of a new equity raise from a group of existing shareholders totalling £250m and the sale of new shares which will generate £443m.

The equity raise mean the group of investors now own 67.6% of Co-Op Bank shares, with the stake of Co-op Group falling from 20% to 1%.

As a result, some formal arrangements including the right of Group to nominate a Director to the Bank Board will end on completion.

Chairman Dennis Holt said: "The Board is pleased to confirm this proposal for a recapitalisation which will mean that The Co-operative Bank can continue as a viable stand-alone entity, with values and ethics at its heart. It is a great outcome for our customers. Our investors share our commitment to building our distinctive ethical franchise and see strong future growth potential for The Co-operative Bank."

Further details of the Proposal are expected to be made available in mid-July. The Bank is seeking to complete the equity capital raising and recapitalisation by the beginning of September 2017.

Earlier this month, Qarati and Swiss investment groups were rumoured to be considering a takeover of the Bank.

According to Sky News, Interritus Limited and Al Faisal Holding "held several rounds of talks" with Co-op Bank, however sources said there are "a series of significant hurdles to any deal being agreed".

Virgin Money walked away from talks regarding a takeover of Co-Operative Bank in May.