Of the Co-op’s plan to raise £500m from bondholders and inject £1bn from its own asset sales to fill a £1.5bn capital hole, Mr Gorvin said: “We are now told the group is to inject £1bn but frankly there is a strong view among those to whom I have spoken that the proposals now being mooted represent the minimum pain for the parent; is acceptable to the authorities and has some chance of acceptability by the investors. In the circumstances I do not believe this is good enough.”
But, erm, if the bondholders are being shafted then why hasn’t the CoOp itself lost all its equity in the bank?
What is it that I’m missing here? Why isn’t equity wiped out before debt gets even nibbled?