Metro Bank Holdings PLC (LSE:MTRO) shareholders are set to vote on a deal to bring in new funds and refinance debt as it risks being deemed unviable by the Bank of England.
A £325 million investment and the refinancing of £600 million of debt was outlined by the bank last month.
The deal is “likely” to be approved and could usher in a “new chapter” for the challenger bank, boss Daniel Frumkin said.
Should the deal be rejected, and the central bank deems it not fit for operations, Metro could be placed under a specific process for managing failed banks.
If the plans are accepted, Jaime Gilinski Bacal, the Colombian billionaire, would become the bank’s largest shareholder through a 53% stake.
His firm Spaldy Investments is expected to invest £102 million.
Bondholders, who backed the plan in October, are set to lose 40% of their investments as part of the deal.
A spokesperson for Metro Bank said: "We are confident that the proposed transaction represents the best outcome for shareholders and therefore it is likely that shareholders will vote in favour."
Shares in the lender have slumped more than 66% in 2023 and fell to a record low of 37.5p in October when reports first emerged about its financial health.
Metro Bank opened 6% higher on Monday, having begun trading at around 38p.