Council to sell £30m bank shares at 'substantial loss'

Warrington Council is set to sell £30m of shares in a bank at a "substantial financial loss".

The authority bought a third share in Redwood Bank in 2017 and is to offload them for an undisclosed sum that it said was "broadly in line" with the bank's latest forecasts.

Warrington Council built up £1.8bn of debt linked to its investment strategy over recent years, leading to the government sending ministerial "envoys" to the council.

The council's cabinet is set to sign off the decision to sell the shares on Monday (13 April).

The full details on the proposed deal are in a confidential council document, but a report said a formal offer had been received which would lead to a "financial return to the council, below the amount the council has invested".

It said the sale would "crystalise a substantial financial loss but would deliver certainty of value".

A report last month published by the envoys working with the council said the authority had lost around £100m through its investment strategy.

The envoys said that, with the exception of loans to housing associations, "all remaining investments had failed to generate surplus income".

Earlier this year, Warrington Council said it had borrowed too much and would consider the future of all of its commercial investments.

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