London hedge fund Caius Capital was key player in Metro Bank rescue

Caius Capital played a critical role in Metro Bank’s rescue.

Founders of Caius Capital, Antonio Batista, and William Douglas, entered into a hectic weekend of talks to strike a deal to keep Metro Bank trading as a standalone company.

After reaching a settlement with Italian lender Unicredit in 2018, the bank’s treatment of complex financial instruments played a critical role in the agreement struck on Sunday evening.

Banking watchdogs had kept a close eye on the deal and had also prepared rival banks like Santander UK to enter a deal with Metro Bank if the financing package had failed to emerge.

The lender’s board had announced a £925 million financial restructuring, with a £150 million share sale, £175 million of new debt, and a £600 million debt refinancing included.

On Monday morning, the shares of Metro Bank surged as they were welcomed by investors, although many are still pending approval from various parties.

The deal significantly dilutes shareholder holdings, while some bondholders would be required to accept substantial reductions in their investments.

Regardless of the deal, a source close to the group led by Caius Capital revealed that the bondholders are “pleased” with the outcome.

If the deal gets voted on, the founder of Spaldy Investment Limited, Jaime Gilinski Bacal, will become Metro Bank’s controlling shareholder.

A spokesperson for the bondholder group was not available to comment.

- Published By Team Timeswire

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