Co-op Bank bailout deal accepted by creditors

The bailout deal proposed by the Co-operative Bank to plug the £1.5 billion black hole on its balance sheet has been approved by bondholders.

The bank announced on Tuesday that its creditors have agreed to the scheme, which was part of the recapitalisation plan, selling off a 70% share of the bank to private investors.

According to a statement posted to the bank’s website, a total of 625 scheme creditors voted, representing around 97.63% of interested parties. 617 of these voted in favour, representing around 99.87% of the votes cast.

The plan must now be formally sanctioned at a court hearing that will be held on Wednesday.

The bailout deal came as a result of the bank’s acquisition of Britainnia Building Society, which led to the collapse of a deal to purchase 617 Lloyd’s branches.

Following this the Reverend Paul Flowers, the bank’s chairman, was arrested after being filmed allegedly buying drugs. The Co-operative Group chairman Len Wardle subsequently resigned.

Last week, Lord Myners was appointed to the board of executives to lead a governance review in light of the scandal.

Further reading:

Ethics, mutuals and the Co-operative Bank’s unclear future

Co-op Bank to close 15% of branches, as hedge funds take control

George Osborne orders inquiry into Co-op’s appointment of Flowers

Co-operative Group chairman Len Wardle resigns amid drug scandal

Former Co-op Bank chairman apologises after drugs scandal