Wednesday, 29 June 2016
Last updated 4 hours ago
Oct 28 2013 | 11:59am ET
The two hedge funds that have stripped Co-operative Group of its control over its bank are promising that the company's ethos will not change as a result.
Aurelius Capital Management and Silver Point Capital, which are providing £1 billion in cash to the Co-op Bank in exchange for Co-op Group's agreement to cut its stake to 30%, moved to assuage concerns that even bigger changes were afoot for the formerly mutually-owned bank.
Co-op Bank is "unique for its ethics and heritage, which are an essential component of the bank's differentiated approach. It is important to us that the bank maintains its unique character and ethos," the hedge funds said.
The firms added that Co-op Group will remain the bank's largest shareholder, and that "the bank will benefit by this connection to the co-operative movement."
Co-op struck the deal with Aurelius and Silver Point to avoid nationalization. The Bank of England has set an end-of-the-year deadline for the bank to recapitalize.