May 7 (Reuters) - Private equity firm Corsair Capital is said to be in talks for buying a stake in the struggling Co-op bank as part of a 400 million pound rescue fundraising, Sky news reported.
Corsair Capital- in which former trade minister Lord Davies is a partner- is one among many equity groups which are trying to acquire a stake in the Co-op Bank.
Co-op bank nearly collapsed last year after the discovery of a 1.5 billion pound hole in its balance sheet, and had to be rescued by bondholders in a move that saw the stake of its former owner Co-operative group drastically reduced.
The private equity groups are looking to buy a stake in the bank due to expectations that some existing shareholders including the Co-operative Group are unlikely to take up their full allocation of rights to buy new shares.
One of the world’s largest investment firms, Apollo Management, is also understood to have expressed an interest according to the British broadcaster.
The report comes on the same day as a review of the Co-op Group by former director Paul Myners was published. The review said the organization should restructure its current ‘manifestly dysfunctional’ board and make it smaller with more members with business experience.
A spokesperson for the Co-op Bank declined to comment on the story. “In the next few business days we will make an announcement on the capital raise. Until then we are not making any formal announcements,” a spokesman for the Co-op bank told Reuters.
Corsair capital could not be reached for comment.
Reporting by Tasim Zahid in Bangalore; Editing by Alden Bentley