The Co-op says it is in advanced talks with existing investors on a proposal to raise equity capital and recapitalize the bank.
“The Proposal, if implemented, would enable the Bank to meet the longer term capital requirements applicable to all U.K. banks (thereby meeting the objective the Bank set at the start of the process) and to continue as a stand-alone entity. The Proposal would also safeguard the Bank’s values and ethics,” the Co-op said in a press release published Monday.
Existing investors in the bank include several U.S. hedge funds such as Cyrus Capital Partners, GoldenTree Asset Management, Silver Point Capital and Blue Mountain. They have been invested in the lender since filling a hole in its finances in 2013.
The Co-op says many of the key commercial aspects on the proposal have already been agreed. Other key matters, such as separating responsibility for the Co-operative pension scheme between the bank and the wider Co-op group, are still being discussed.