METRO BANK has calmed fears about its financial state after a £925million rescue that sees a Colombian billionaire become its biggest shareholder.
A week after its share price collapsed amid fears about its race to raise funds, the challenger bank said the fresh injection of capital would secure its future.
Its shares spiked as much as 20 per cent yesterday as the market reacted favourably, before closing up 4.45p — or 9.83 per cent — to 49.70p, valuing the business at £85.82million.
The financing package should mean renewed confidence for Metro Bank’s customers.
Banks must always reassure customers to keep their money in accounts, rather than trigger an exodus which could weaken its financial position even further.
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The rescue package comprises £600million of debt refinancing on top of a £325million capital raise — which will include £150million of new shares sold at 30p a share.
Colombian banking billionaire Jaime Gilinski Bacal is putting in £102million to boost his stake from just over nine per cent to 53 per cent.
The proposed deal will still mean that equity and bondholders will suffer a big loss on their investment, because it was done at such a hefty discount.
Analysts at Goodbody said: “The chief executive and board have done the best they could in terms of reinvigorating the business.
“So maybe it’s just the least worst outcome now and a bitter pill that needs to be necked. However, the equity-raising specifics need to be more transparent.”
Metro Bank has focused on having branches on high streets, meaning it incurs more costs than rivals who concentrate online.
Mr Gilinski Bacal, an investor since 2019, said he has belief in the need “for physical and digital banking”.
Rivals Shawbrook, NatWest and Lloyds Bank were all linked to takeover interests at the weekend, but the refinancing is a poison pill to any bid approaches.
Metro remains in talks over selling some of its £3billion mortgage book, which could see loans transferred to other lenders.
Zend in the big spender
THE world’s biggest luxury group, LVMH, will today provide an insight into how the wealthiest are spending as the rest of society struggles with rising bills.
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The latest results of the French owner of Louis Vuitton, Fendi, Dior and jeweller Tiffany & Co, will be closely watched by investors who want to know how China’s recovery is shaping up.
Chinese big spenders had been an important clientele for luxury brands, but Beijing’s drawn-out Covid restrictions have hit their ability to shop overseas.
However, actress and singer Zendaya showed the Vuitton brand is still doing all-white at Paris Fashion Week.
Amazon pay's up at Xmas
AMAZON has ramped up competition with retail rivals eager to recruit Christmas workers by announcing two rounds of wage rises.
The internet giant said yesterday it would spend £170million on increasing pay for its warehouse workers over the next six months.
Amazon already employs 75,000 staff in the UK but says it wants to take on 15,000 seasonal workers ahead of the peak seasonal trading period.
It will start paying minimum wage staff between £11.80 and £12.50 an hour — and from April next year minimum starting salaries will be between £12.30 and £13 per hour.
Amazon warehouse workers in Coventry went on strike for more pay earlier this year — and yesterday’s rises may not satisfy union bosses.
The GMB has called on the company, which is valued at $1.3trillion, to bump up hourly wages to £15 to help workers in the cost-of-living crisis.
Pay gap's prize win
AMERICAN Claudia Goldin has become the first solo female winner of the Nobel Prize in economics, for her work on the gender pay gap.
She studied how female employment has evolved over 200 years, finding that the pay gap starts to kick in after a woman has her first child.
The Harvard professor is the third woman to win the economics Nobel prize since it began in 1901, but the previous two have shared it.
Ineos visits Sir Keir
SIR Jim Ratcliffe’s INEOS has made its first ever appearance at the Labour conference — in an apparent show of its frustration with energy policy.
Billionaire Sir Jim has previously accused the Government’s approach as “crap”.
An Ineos spokesman said: “I’m not sure that we would have found Jeremy Corbyn that receptive, but Keir Starmer seems much more business-orientated, so we need to engage.”
The firm, which was also at last week’s Tory party conference, wants “consistency, rather than flip-flopping”.
BREAKDOWNS related to potholes are up by nearly a third over the past two years, the AA said.
Boss Jakob Pfaudler said the 30 per cent rise in call-outs due to the UK’s damaged tarmac “was a reflection on the state of the roads”.
Magnums demo
UNILEVER faced fresh protests yesterday over selling ice creams in Russia.
The firm is continuing to sell Magnums in the country.
Ukrainian war veterans and bereaved family members targeted its London HQ.
One protester, Oleh, 34, held a picture of his mum who died after Vladimir Putin’s invasion and said: “This is the human cost of this war.”
New CEO Hein Schumacher had claimed he would look at the sales “with a fresh pair of eyes” but no further decision has yet been made.