UK’s Metro Bank hired consulting firm Ernst & Young to find a buyer as the bank is looking to strengthen its balance sheet. Sources that are close to the matter informed that Ernst & Young (EY) approached various lenders with the aim of agreeing to a deal before the markets open again on Monday. The Bank of England has the responsibility to monitor the entire matter.
Initially, EY approached JP Morgan Chase. However, it later decided not to proceed. There was also a possible merger with a fellow mid-tier bank named Shawbrook. Despite Shawbrook’s interest, the talks between the two banks did not proceed. The information was put forward by people familiar with the matter.
However, last night, Metro Bank Holdings Plc received a $1.1 billion financial package from Colombian financier James Gilinski. This deal will impose a 40% haircut on some bondholders. The deal will give breathing space to the British retail and commercial bank after it saw its share price fall last week.
According to Bloomberg.com,
“The package consists of a £325 million capital raise and £600 million of debt refinancing, the bank said in a statement Sunday, confirming an earlier Bloomberg report. The fresh capital involves £150 million of new equity and £175 million of new bail-in bonds due in 2028 that’s supported by existing investors.”
James Gilinski was optimistic about the agreement as it enabled the British bank to focus on growth and build on its foundation. Gilinski also stated that he has been an active investor in the Metro Bank since 2019.
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