The Co-operative Bank has cancelled plans to sell itself as talks with existing investors, which include several U.S. hedge funds, to recapitalize the troubled U.K. lender reach an advanced stage.
The bank launched a formal sale process in February this year in order to raise capital and meet its requirements.
The bank has struggled since nearly collapsing in 2013. Last year, it reported a loss of £477 million ($607 million), although this was down from 2015’s loss of £610 million.
The Co-op says it is in advanced talks with existing investors on a proposal to raise equity capital and recapitalize the bank.
“The Proposal, if implemented, would enable the Bank to meet the longer term capital requirements applicable to all U.K. banks (thereby meeting the objective the Bank set at the start of the process) and to continue as a stand-alone entity. The Proposal would also safeguard the Bank’s values and ethics,” the Co-op said in a press release published Monday.
Existing investors in the bank include several U.S. hedge funds such as Cyrus Capital Partners, GoldenTree Asset Management, Silver Point Capital and Blue Mountain. They have been invested in the lender since filling a hole in its finances in 2013.
The Co-op says many of the key commercial aspects on the proposal have already been agreed. Other key matters, such as separating responsibility for the Co-operative pension scheme between the bank and the wider Co-op group, are still being discussed.
Co-op bank cancels sale process, with US hedge funds potentially injecting new capital