Attribution: Basher Eyre
Co-operative Bank’s American hedge fund owners have started a search for a new chairman for the bank as they attempt to rebuild the business following a rescue deal amounting to £700m.
Sky News reported that Dennis Holt, the bank’s current chairman would step down in 2018. It follows the exit of the Co-op Bank’s former finance director, John Worth, who left shortly after the rescue deal of the bank.
Last month, Holt, who is a former executive at Lloyds TSB and Bank of Ireland, also revealed that he would also resign from the board of Beazley, an insurance group.
Worth has been replaced by the former finance chief at Shawbrook, Tom Wood, who first joined Co-op Bank with a brief to overhaul the bank’s operations.
Co-op Bank was able to secure a rescue package deal with the bank’s hedge fund investors in June. However, it said that it would continue to safeguard its “value and ethics.”
The hedge fund group included Cyrus Capital Partners, Blue Mountain Capital Management, Silver Point, and GoldenTree Asset Management.
Under the said arrangement, the shareholding of Co-op Group in its namesake bank dropped from 20 percent to around one percent.
The bank and the group also agreed on the separation of their sections of the Co-operative Pension Scheme.
The bondholders of the hedge fund effectively wrote off the £443m that they were owed in a debt-for-equity swap in order to give them a 17 percent stake.
They also agreed to help in raising a further £250m with a shares issue through a new holding company that will control a 67.6 percent stake in the Co-op Bank.
In January, the Co-op Bank had itself up for sale, inviting attention from various lenders, including Virgin Money.