The Co-op: Response to The Co-operative Bank statement re agreement on capital raising
28 June 2017
The Co-op Group welcomes the announcement from The Co-operative Bank on the terms of the capital raising plan to secure the Bank’s long term future which includes agreement on the future structure of the shared Co-operative Pension Scheme and provides security for scheme members.
Throughout the multi-party process to find a capital solution for the Bank, the Group has worked hard to provide certainty for and protection of the interests of its members, colleagues, investors and the members of the shared pension scheme (Pace). The Group confirms that it and the Bank have agreed principles with the Pace Trustees to separate the respective sections of the scheme and to remove the Bank’s obligation to support the Group's Pace scheme liabilities. The Group and the Trustees have also negotiated with the Bank a recovery plan for the Bank section of the Pace scheme which will see the Bank contribute £100m over 10 years and provide initial collateral of £216m from the point of sectionalisation.
The Group’s shareholding in the Bank will fall from 20% to circa 1% and the Relationship Agreement between Group and Bank which covers, among other things, the promotion of Bank services to members of Group, will naturally fall away and come to a formal end in 2020.
The Group confirms that it is supportive of the plan and intends to vote in favour of the capital raising.
Jon Church: Tel: 07545 210812
Russ Brady: Tel: 07880 784442
Susanna Voyle, Jonathan Sibun: Tel: 020 7353 4200