Belfast Telegraph

Co-operative Group faces an uncertain future


THE future of the Co-operative Group looks uncertain ahead of annual results which are expected to confirm £2.5bn in debts.

The troubled mutual group has been rocked by disputes between warring factions over a proposed shake-up.

Former B&Q boss, Euan Sutherland, walked out as chief executive last month after claiming the corporate structure of the loss-making chain of supermarkets, pharmacies and funeral homes was "ungovernable".

The organisation has estimated net debt of £1.2bn and is expected to report losses of £2.5bn on Thursday.

Former minister, Lord Myners, resigned from the Co-op board last week after his idea of a shake-up of its corporate structure was met with fierce opposition from proponents of its democratic mutual model. However, Richard Pennycook, the stand-in boss of the group, has said Lord Myners' controversial reforms would still be taken seriously despite his resignation from the board.

The embattled group's debts are mostly owed to its syndicate of lending banks, including Barclays, Lloyds Banking Group and Royal Bank of Scotland.

The immediate priority for the Co-op will be to decide whether to support an additional £400m fundraising by its banking arm, which is now under the majority control of bondholders following a rescue last year.

Belfast Telegraph