NBNK to wind-up as Lloyds agrees Verde terms with Co-op
After a long wait, UK banking group Lloyds announced that it has agreed on the terms of the branch-network sale, otherwise known as Project Verde, to the Co-operative Group (Co-op).
After a long wait, UK banking group Lloyds announced that it has agreed on the terms of the branch-network sale, otherwise known as Project Verde, to the Co-operative Group (Co-op).
The Verde business has 632 branches across the UK with around five million customers, representing 6% of the UK branch network and, when combined with the Co-op business, around 7% of UK current accounts.
The European Commisson-mandated divestment of 632 retail and commercial branches is around three months behind schedule.
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"The proposed transaction would be based upon a revised smaller business perimeter, which has no funding gap in terms of assets and liabilities, and is likely, in terms of scale, to have equity capital of £1.5bn supporting it," Lloyds said in a statement late Wednesday.
Lloyds said it has informed private equity group NBNK Investments about the decision and "appreciates their interest in the Verde business".
NBNK was in discussions with Lloyds which could have led to an acquisition of the assets constituting a reverse transaction. Now that these discussions have been terminated, trading of the group's shares was restored on Thursday and the stock subsequently dropped around 40% early on.
In a statement last night, NBNK said: "The directors of NBNK have concluded that there are no other UK banking assets available for sale that would meet the company's objectives and, consequently, they expect to commence steps to wind-up the company."
"This is consistent with the prospectus issued at the time of admission to AIM in August 2010, which states that if the Company was unable to fulfil its strategic mandate then it will be wound-up and any remaining cash would be returned to shareholders.As part of this process the Company will seek cancellation from AIM."
NBNK Chief Executive Gary Hoffman said that he was disappointed that the "door has now been closed on this opportunity".
BC
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