Metro Bank has shored up £325 million capital raise with £600 million in debt financing in a deal with Spaldy Investments Ltd, the bank’s largest shareholder.
Spaldy are to contribute £102 million and will then be Metro Bank’s controlling shareholder, holding around 53% once the transaction is completed.
Last week shares fell amid the reports Metro Bank are in talks with investors to raise equity and debt funding.
Metro Bank’s market capitalization is now less than £100 million compared to having been valued at £3.5 billion around five years back.
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Over the past six months the bank’s shares has lost almost two thirds of their value, with the stock market value being reduced over the past few years.
Daniel Frumkin, chief executive officer at Metro Bank, said, “Today’s announcement marks a new chapter for Metro Bank, facilitating the delivery of continued profitable growth over the coming years.
“Metro Bank made a statutory profit after tax in Q3 2023 and continues to demonstrate ongoing momentum as we strive towards our ambition to be the UK’s number one community bank.
“Our strong franchise is underpinned by our loyal customer base and engaged colleagues and we will continue to develop the Metro Bank offer to provide the digital and physical banking services our customers expect.
“We thank our shareholders and noteholders for their continuing support of Metro Bank and our customers.”
Jaime Gilinski Bacal, founder of Spaldy Investments Limited, said, “I have been an active investor in Metro Bank since 2019. The opportunity to become the bank’s major shareholder is driven by my belief in the need for physical and digital banking underpinned by a focus on exceptional customer service.
“I believe that the package announced today enables the bank to pursue growth and build on the foundational work undertaken over the past three years.”