BONDHOLDERS in the Co-op Bank have accused the troubled lender of over-stating its losses in an effort to force them to take part in the planned recapitalisation.
The Co-op Group is planning to put £1bn into the bank and for investors to inject another £500m in a bid to plug a black hole in the lender’s capital position.
A group of investors has written to the banks management to question the decision to write off a £150m IT system, according to the Sunday Times.
“We do not understand how such a large sum can arbitrarily have been written off so soon after it was previously considered appropriate to hold the tax assets in the balance sheet, when presumably the auditors were satisfied with the same,” the letter is reported as saying.
The Co-op Bank said it will engage closely with investors when the prospectus for its recapitalisation and its float on the stock market is issued in October.
City A.M. Reporter