The American hedge fund owners of Co-operative Bank have started a hunt for a new chairman as they try to rebuild the business following a £700m rescue deal.
Chairman Dennis Holt will step down next year, Sky News reported. It follows the exit of John Worth, the Co-op Bank’s former finance director, who left just weeks after the bank’s rescue deal.
Worth has been replaced by Tom Wood, former finance chief at Shawbrook, who first joined Co-op Bank with a brief to overhaul its operations.
Co-op Bank secured a rescue package deal with its hedge fund investors in June, but said it will continue to safeguard its “value and ethics”.
The hedge fund group comprised Blue Mountain Capital Management, Cyrus Capital Partners, GoldenTree Asset Management and Silver Point.
Under the arrangement, Co-op Group’s shareholding in its namesake bank fell from 20 per cent to around one per cent.
The bank and the group also agreed to separate their sections of the Co-operative Pension Scheme.
The hedge fund bondholders effectively wrote off £443m that they were owed in a debt-for-equity swap to give them a 17 per cent stake.
They also agreed to help raise an additional £250m with a shares issue through a new holding company that will hold a 67.6 per cent stake in Co-op Bank.
Co-op Bank put itself up for sale in January, attracting attention from a number of lenders, including Virgin Money.