Metro Bank Secures £925 Million to Address Balance-Sheet Issues
Metro Bank has secured £925 million in funding to address its balance-sheet issues, including a capital raise of £325 million and debt refinancing. Investors and bondholders will experience investment reduction, and Jaime Gilinski Bacal will become t...
Troy D. Hanson
October 09, 2023
Metro Bank has announced that it has successfully secured £925 million ($1.13 billion) in funding to resolve its balance-sheet issues. As part of the agreement, investors and bondholders will experience some investment reduction, while Jaime Gilinski Bacal is expected to become the controlling shareholder.
The funding package, which was finalized on Sunday, includes a capital raise of £325 million. This raise is divided into £150 million worth of new shares from the bank's major shareholders and £175 million in new debt from bondholders. Additionally, there will be £600 million in debt refinancing.
To implement the share placement, the bank has priced it at 30 pence per share, indicating a 34% discount from the previous week's closing price.
One of Metro Bank's largest shareholders, Spaldy Investments, has contributed £102 million to the funding package. This investment will grant Spaldy Investments majority control of Metro Bank upon completion of the transaction, resulting in a 53% shareholding. It is important to note that Spaldy Investments is owned by Jaime Gilinski Bacal.
As part of the debt refinancing, holders of Metro Bank's tier 2 bonds will experience a 40% to 45% reduction in their investments.
The Bank of England has closely monitored and supported the funding negotiations. In a statement released on Sunday, they expressed their approval of the steps taken to enhance Metro Bank's capital position.