Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Metro Bank seals a near billion pound rescue deal

by October 9, 2023
October 9, 2023
Metro Bank seals a near billion pound rescue deal

Metro Bank has clinched a £925 million funding deal last night that shores up the troubled lender but inflicts pain on its investors and leaves the group shouldering expensive borrowing costs.

The agreement, which will hand the Colombian billionaire Jaime Gilinski control of Metro, followed a weekend of mounting speculation about its future, as the bank’s advisers scrambled to agree a package before financial markets opened today.

Those negotiations were monitored closely by the Bank of England’s Prudential Regulation Authority, which said yesterday that it welcomed the steps taken by Metro “to strengthen its capital position”.

Yet the deal comes at a price for both the bank and its investors.

Shareholders will be heavily diluted by a £150 million equity-raising, which is being priced at 30p a share, a discount to the 45¼p level at which the stock closed last week.

The majority of the equity is coming from Gilinski, whose vehicle Spaldy Investments is contributing £102 million. This will take Spaldy’s stake from 9.2 per cent to about 53 per cent. It also dwarfs Metro’s stock market value of around £70 million.

As well as including £175 million of new debt, the deal involves the refinancing of £600 million of outstanding borrowings, which will inflict a haircut of at least 40 per cent on some bondholders. Metro will be required to pay high rates of interest as part of this refinancing, with the coupons on some of its debts rising to a painful 14 per cent and 12 per cent.

It follows a tumultuous few days for Metro, with the PRA approaching several rival banks to sound out their appetite to buy the bank. A number of players, including America’s JPMorgan Chase, which has a consumer banking business in Britain, were uninterested in a deal for all of the lender. However some, including NatWest, Lloyds Banking Group and Santander UK, are believed to be interested in parts of the group. Metro last night confirmed it was in talks about selling a residential mortgage portfolio of up to £3 billion.

Metro opened its first branch in 2010 with lofty ambitions to shake-up the UK banking market.

Founded by Vernon Hill, an American entrepreneur, and Anthony Thomson, Metro had sought to take on the big incumbent high street lenders that have long dominated the UK market.

Yet its plans were thrown into turmoil in 2019 when Metro revealed it had made an accounting blunder which meant that it was not holding enough capital.

While Dan Frumkin, Metro’s chief executive since 2020, has sought to revive the lender following that debacle, his efforts have been dealt a severe blow by the PRA’s decision to resist an attempt by Metro to reduce the capital it needs to hold against its residential mortgage book.

Metro revealed the PRA’s stance last month, which caused a sell-off in its shares by fuelling concerns about the lender’s capital position. Investor worries were exacerbated last Wednesday when it emerged that Metro was seeking hundreds of millions of pounds in debt and equity.

Read more:
Metro Bank seals a near billion pound rescue deal

0
FacebookTwitterGoogle +Pinterest
previous post
Britain’s manufacturers urge Hunt to ditch autumn statement to provide financial solidity
next post
Why Blocking Blue Light Can Impact Your Productivity—and How You Can Choose the Best Glasses for the Job

You may also like

Its time to inject yourself into the thick...

September 16, 2022

Future-Proofing Your SME’s Financial Records (and Your Budget)

May 28, 2025

UK government contemplating reversal of “Boiler Tax” amidst...

February 5, 2024

Trinny London secures £15m growth funding to fuel...

September 23, 2024

Cambridgeshire council, UK’s first, to trial four-day week...

May 1, 2023

Squishmallows launches legal fight against Build-A-Bear

February 13, 2024

Inicio AI secures £2.6m to transform affordability assessments...

April 15, 2025

Jeremy Hunt Proposes Pension Fund Overhaul to Boost...

March 4, 2024

The Essential Technologies Driving Building Decarbonization

October 13, 2024

What to Do if You Don’t Recognise a...

September 22, 2022

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump ally stands firm against ‘big, beautiful bill’ despite pressure: ‘It’ll completely backfire’

      June 8, 2025
    • Rubio condemns assassination attempt on Colombian presidential candidate Miguel Uribe

      June 8, 2025
    • Obama WH physician says Biden doc should have performed cognitive test

      June 8, 2025
    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved