Co-op Bank also recorded a loss of pre-tax profit of £ 7.2million in the first three months of 2021, following a loss of £ 27million a year earlier. Photo credit: John Keeble / Getty Images

The Co-op Bank said on Wednesday that two U.S. private equity firms have agreed to buy a minority stake in the company from an existing investor.

JC Flowers and Bain Capital Credit collectively purchased a 10.01% stake in Class A shares of BlueMountain Capital – a hedge fund where Jes Staley, current director of Barclays (BARC.L), was formerly managing director.

The deal, which also gives the pair access to 12.05% of the B shares, remains subject to regulatory clearance.

B shares are a class of shares issued by a company that offer less favorable voting rights to shareholders than class A shares.

While the value of the deal has not been disclosed, it marks another significant change in ownership of the bank, which has been transformed over the past 10 years after finding a gaping 1.5 billion dollar hole. pounds sterling ($ 2 billion) in its finances.

The revelation led the co-op group to sell its stake in Co-op Bank, which is currently controlled by a US hedge fund group, which bailed it out as part of a £ 700million bailout deal in 2017.

Silver Point Capital, GoldenTree, Anchorage Capital, Cyrus Capital and fund manager Invesco together own 85% of the bank. JC Flowers and Bain Capital Credit will buy out BlueMountain’s stake.

New York-based JC Flowers, one of the world’s largest private equity investors, was founded in 2001 and focuses on global investments in banking and financial services.

The company run by former Goldman Sachs (GS) billionaire partner J Cristopher Flowers currently has $ 5.4 billion in assets under management, including notable transactions in the UK. He played a pivotal role in providing capital to enable the demutualization and stabilization of the Kent Reliance Building Society after the 2008 financial crash.

Boston-based buyout firm Bain Capital recently struck a deal to acquire LV =, one of Britain’s oldest financial services mutuals.

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On Wednesday it also recorded a loss of pre-tax profit of £ 7.2million in the first three months of 2021, down from a loss of £ 27million a year earlier. He came on a total income of £ 81.2million, up 7%.

The lender’s restructuring plan was also ahead of schedule, he said in the separate business update.

“This half year will have reached the midpoint of our turnaround strategy and we are ahead of our expectations,” said Managing Director Nick Slape.

Slape, who was named CEO last year, added that he expects the bank to return to “sustainable profitability” from 2021.

“We have achieved a resilient performance by continuing to focus on generating revenue, simplifying and reducing our operating costs. Our retail business continues to grow, with net residential loans increasing 6% in the quarter with a solid pipeline, ”he added.

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