New finance

Metro Bank seals deal to shore up balance sheet

Metro Bank
Metro Bank required new equity and debt (pic: Terry Murden)

Metro Bank sealed a £925 million funding deal last night that has bolstered its balance sheet which gives the Colombian billionaire Jaime Gilinski majority control and investors taking a hit.

The Bank of England’s Prudential Regulation Authority issued a statement saying that it welcomed the steps taken by Metro over the weekend to “strengthen its capital position”.

Shareholders will see their investments diluted by a £150 million equity-raising, which is being priced at 30p a share, a discount to the stock’s 45.25p closing price last week.

Most of the equity is coming from Mr Gilinski, whose vehicle Spaldy Investments is contributing £102m, taking his stake from 9.2% to about 53%. Metro has a market value of about £70m.

The deal also involves £175m of new debt and refinancing of £600m of outstanding borrowings, eroding the value of bonds and imposing higher interest charges on the bank.

Metro last night confirmed it was in talks about selling a residential mortgage portfolio of up to £3 billion, with a number of banks said to be interested.

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