TROUBLED lender Bradford & Bingley is reportedly set to pay a "success fee" to investment bank Goldman Sachs despite the collapse of its rescue deal with private equity firm TPG.
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, according to a Sunday newspaper report.
The fee will be paid despite the fact that the group had to ch
ange plans for its rights issue again last week after TPG withdrew its £179 million cash injection.
The news is likely to further anger shareholders, who were already upset about the way the deal with TPG had been carried out.
It also emerged last night that Britain's financial regulator was monitoring the B&B situation.
Speaking on the sidelines of a business conference in France, Financial Services Authority chairman Callum McCarthy said: "We have taken a close interest in it."
TPG, formerly known as Texas Pacific Group, had been lined up to buy 23 per cent of B&B, with another £258m 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 HBOS-owned Insight Investment, Standard Life Investments, M&G Investment Managers and Legal & General Investment Management, are backing an enlarged £400m cash call.
Exact details of the size of the fees B&B will pay to Goldman Sachs are not known, and B&B declined to comment on the reports. Goldman Sachs was brought in to advise B&B after its initial plans for a rights issue collapsed, and it put forward the solution involving TPG.
But the group said its role had been misunderstood and it was not connected to TPG.
The full article contains 317 words and appears in The Scotsman newspaper.
