Troubled bank Bradford & Bingley is set to pay a “success fee” to investment bank Goldman Sachs despite the collapse of its rescue deal with private equity firm TPG, reports have said.
The buy-to-let lender will pay the bank a basic fee for advising the board, as well as an additional fee once a new funding package is in place, it was claimed.
The fee will be paid despite the fact that the group had to change plans for its rights issue again last week after TPG withdrew its £179 million cash injection. TPG, formerly known as Texas Pacific Group, had been lined up to buy 23 per cent of B&B, with another £258 million coming from a rights issue.
But it walked away after B&B was effectively flagged up as a greater investment risk by ratings agency Moody’s.
Under the new plan, a group of B&B’s largest shareholders, including M&G Investment Managers, Legal & General Investment Management, Insight Investment and Standard Life Investments, are backing an enlarged £400 million cash call.
Exact details of the size of the fees B&B will pay to Goldman Sachs are not known.
Goldman Sachs was brought in to advise B&B after its initial plans for a rights issue collapsed.