Friday July 4, 11:00 AM
Investors Bail Out Hard-Up Bank
By Sky News
Bradford & Bingley's major shareholders have agreed to salvage its £400m funding plan after a US private equity firm walked away from the deal. Texas Pacific Group was due to buy 23% of the bank as part of a wider funding
package.
But it withdrew its £179m offer after B&B's investment status was downgraded by a ratings agency.
However, B&B - Britain's biggest buy-to-let lender - then set in motion a contingency plan that it had discussed with the Financial Services Authority.
It says a group of its largest shareholders including M&G Investment Managers and Life Investments are now backing its funding proposals.
The bank, which has been badly hit by the credit crunch, has been trying to raise £400m through a rights issue to shore up its finances.
Shareholders were due to vote on this on Monday but will now meet the following week.
Ironically, the rescue plan involving TPG had attracted a raft of criticism from investor groups.
The Association of British Insurers had branded it "unacceptable" because it removed the right of pre-emption for shareholders.
This is where new shares are offered to current shareholders in proportion to their existing holdings.
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