UK bank’s shares suspended twice amid cash crisis
Shares in the UK’s Metro Bank were briefly suspended from trading twice on Thursday, after the stock plunged nearly 30% over reports of urgent fundraising efforts to shore up the bank’s balance sheet.
Metro Bank shares have now fallen more than 60% since September 12, when it revealed that UK regulators had failed to approve a plan that would allow Metro to run its mortgage business at a lower cost.
The London Stock Exchange confirmed to CNBC that the brief suspensions were triggered by its circuit breaker mechanisms because of Metro Bank’s stock crash.
The bank, which was reportedly attempting to raise £600 million ($727 million) in debt and equity, said in a statement on Thursday that it is currently considering “how best to enhance its capital resources.”
The options include asking investors to help refinance $424 million worth of debt before it falls due in 2025, as well as raising hundreds of millions of pounds through the sale of debt, shares, or assets.
“No decision has been made on whether to proceed with any of these options,” Metro Bank stated.
Rating agency Fitch placed Metro on negative watch on Wednesday, citing increased risks to its business model, capital position, and funding.
Founded by US billionaire Vernon Hill in 2010, Metro Bank became the UK’s first new high-street bank in more than a century. In 2019, it was hit by a misreporting scandal that led to the exit of its chair and chief executive.
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