Qatar conglomerate joins Co-op Bank bid | Business

A Qatar-based company has been identified as part of a consortium interested in making a bid for the troubled Co-operative Bank.

Al Faisal Holding, a Qatari conglomerate with interests ranging from hotels to transport, was cited as a bidder for the hedge fund-owned bank in a deal being co-ordinated by Interritus.

The Co-op Bank put itself up for sale in February, hoping to attract interest in a business that has 4m customers and an avowedly ethical stance.

The bank has been seeking a long-term solution to its future since 2013 when it was discovered that the bank – then 100% owned by the Co-operative Group of supermarkets and funeral homes – needed £1.5bn to keep afloat. Its financial difficulties were followed by revelations about its former chairman Paul Flowers who was later fined for possessing cocaine, crystal meth and ketamine and was dismissed as a minister by the Methodist church earlier this year.

In 2013, the bank found the capital it needed in a rescue deal led by hedge funds, who will now be influential in determining the outcome of any discussions with potential bidders. The City believes the most likely outcome to the bank’s latest fundraising exercise will involve hedge funds stumping up the cash, as part of a transaction involving the bank’s bond holders and issuing new shares.

The Co-op Bank has already warned bondholders that potential bidders have sought “some form of liability management exercise” – which could require investors taking losses in return for equity stakes.

An April, the City was told the bank had “received a number of non-binding proposals from strategic and financial parties”. Lenders such as Virgin Money were originally considered potential bidders.

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In March the bank reported a loss of £477m, which took its cumulative losses to £2.6bn and forced the business to announce more branch closures that would reduce its estate to 95, around 200 less than five years ago.

Interritus is an investment firm that owns a stake in Austrian bank Kommunalkredit and was founded by a former senior Deutsche Bank employee, Patrick Bettscheider.

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