The UK’s troubled Co-operative Group is to reduce its stake in the Co-op Bank, which currently stands at 30%.
The Co-op Bank confirmed that it was planning to raise £400m ($678m) of capital by issuing new shares.
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However, the Co-op Group said it expected to remain the bank’s biggest single shareholder, with the next four biggest shareholders promising to buy up 31% of the new shares between them.
The lender’s CEO Niall Booker said: "We have the support of our five largest shareholders for this transaction."
The bank also announced that chairman Richard Pym would step down from his role by the end of 2014.
In March, the Co-op’s then CEO, Euan Sutherland, stepped down, saying the group was "ungovernable".
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By GlobalDataThe Co-op Bank was also rocked by scandal when former chairman Paul Flowers stepped down over concerns over expenses and was then embroiled in a sex and drugs scandal that dated back to his time at the bank.
Booker said of this latest high profile resignation: "I would like to take this opportunity on behalf of the Board to thank our chairman Richard Pym for his service to the Bank.
"He has been instrumental in the important governance changes which have been implemented at board level and his relentless appetite to bring about change and improvement has been an inspiration to us all."
The Co-op Bank announced in March that it had discovered an additional £400m costs, including fines for misconduct, which would need to be covered by the issuing of new shares.
This latest share offering comes on top of a £1.5bn bailout in December that saw the Co-op forced to cede control of the bank, with investors taking a 70% stake.
The Co-op Group said it remained "supportive of the Bank and its strategy" in a statement on Friday.
Investors have been offered 0.8 new shares for each existing share and the Co-op Bank expects to raise about £384m after commissions, costs and expenses.
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