LONDON (Reuters) - Britain’s Co-operative Bank has revamped its board to increase its independence from its parent Co-op Group and comply with corporate governance rules before listing this year as part of a 1.5 billion pound rescue plan.
Co-op Group directors Duncan Bowdler, Peter Harvey, Bob Newton and Len Wardle resigned as non-executive directors of the bank, it said on Wednesday.
They will be replaced by three independent directors and a new representative of the Co-op Group. Two existing Co-op Group representatives - Chief Executive Euan Sutherland and Ben Reid - will also remain on the Co-op Bank board.
Co-op Bank, which has 4.7 million customers, has racked up big losses on commercial property and, in June, the Co-op Group said bondholders must convert their debt to shares while the group will inject 1 billion pounds of capital and retain a majority stake before the bank lists on the stock exchange.
It is due to launch the offer this month.
“The changes are part of preparation to increase the independence of the bank ahead of the launch of the exchange offer, part of the wider capital action plan announced on June 17, 2013,” it said on Wednesday.
The group’s plan forces 500 million pounds of losses onto bondholders, or 30 percent of their holdings, and needs their support but will go ahead this year if the listing is approved.
A group of bondholders, advised by investment bank Moelis & Co, put forward an alternative plan in September, seeking a bigger equity stake than proposed by the group’s own plan.
The bank then set up an independent committee to examine alternative proposals and has held talks with the Moelis-led group.
The Moelis plan, made on behalf of institutions owning about 43 percent of the bank’s lower Tier 2 bonds, attempts to squeeze better terms out of Co-op Group and potentially give bondholders majority ownership of the bank.
Editing by Louise Ireland