The Co-op Bank received “overwhelming” support for its recapitalisation plan after 99.9% of votes were in favour. Proposals are now expected to be approved later this month.
Some 78% of investors in 13% and 5.5555% permanent interest-bearing bonds (Pibs) registered their vote, exceeding the 75% participation rate needed. Even though the rescue deal has been agreed, investors are expected to take a hit in terms of both interest and capital.
A statement was released saying, “The Co-operative Group and the Cooperative Bank are delighted at the overwhelming levels of support of the liability management exercise at this critical juncture, and we would like to thank our bondholders and preference share holders for backing the recapitalisation plan.
“We are now highly confident that our £1.5 billion recapitalisation plan for the Co-operative Bank can be achieved.”
On Friday bondholders of the bank were asked to vote for or against the £1.5 billion rescue plan. The bank had already reached an agreement with institutions, which saw hedge funds take a 70% stake in the bank and the announcement that 15% of branches would close.
The plan has been controversial with many questioning if the Co-operative Bank can maintain its ethical stance, following the involvement of hedge funds and recent scandals. The bank has stated that ethics are in its constitution and high standards will be maintained.