Shareholders give Metro Bank refinancing deal the green light
Shareholders of Metro Bank have given the go-ahead to a funding deal that will help shore up the finances of the embattled UK high-street bank.
The £925 million refinancing plan, compiled by Morgan Stanley and Moelis, comprises a £325 million equity capital raise and £600 million in debt financing. It also raises the stake of the bank’s largest shareholder, Colombian billionaire Jaime Gilinski Bacal’s Spaldy Investments, from 9% to 52.88% in exchange for its leading $126 million investment.
The bank’s existing shareholders came together on 27 November to vote on the deal. According to a filing with the London Stock Exchange, where the bank is listed, the refinancing deal was “duly passed with very strong support with over 90% of shareholders voting in support of all resolutions”.
Speaking to FinTech Futures on the results of the vote, Metro Bank says shareholders “voted overwhelmingly in favour of a new capital package for the bank”, and that the positive outcome “proves there is a place in retail and business banking for our model of stores”.
According to the firm, it plans to strengthen its place in retail and business banking by expanding its presence, with new locations planned for the north of England “over the next two years”.
Meanwhile, Sky News has also reported that the bank is in the midst of negotiations with Barclays to purchase its residential mortgage book, which is currently valued at £3 billion, in a bid to boost its finances further. However, any proposed deal is still yet to be officially announced.
The positive outcome of the vote, paired with the potential sale of its mortgage portfolio, could extend a valuable lifeline to Metro Bank, which has endured lengthy economic headwinds this year.
Financial crime risk mismanagement landed it on the Financial Conduct Authority’s (FCA) watchlist earlier this month, while its shares plunged over 20% in October after its plans to raise capital from its investors were revealed.