THE TROUBLED Co-operative Bank today unveiled a £1.5bn recapitalisation plan, which chief executive Euan Sutherland says will “ensure its future”.
£1bn will be contributed this year and £0.5bn will be contributed in 2014, through a bail-in plan, where bondholders will swap debt for equity.
Precise details of the plan are yet to be announced, but will include the issue of a fixed-income instrument by the Co-operative Group, a rights issue by the bank and proposals for small retail investors.
However, pensioners and other retail investors will face millions of pounds of losses under the plans, according to Philip Aldrick in the Telegraph today.
“This announcement marks an important turning point for The Co-operative Bank,” said Richard Pym, non-executive chairman of The Co-operative Bank.
“The completion of the measures announced today will provide the foundations to support the long-term success of the bank in offering a real alternative to customers.”