LONDON, Reuters Embattled British bank Metro announced a 325 million pound 396.5 million capital raise and 600 million pound debt refinancing on Sunday, after a weekend of urgent talks to bolster its balance sheet after a volatile week of trading.

The deal would hand majority shareholder control to its biggest investor Colombian billionaire Jaime Gilinski and would entail a hit for bondholders, who would then switch into higher interestpaying bonds.

Metro Bank had sought to shore up its finances after a string of setbacks in recent years, including accounting errors, leadership departures and delayed regulatory approval for key capital reliefs.

The lender which launched in 2010 to challenge the dominance of Britain39;s big banks said the capital raise comprised 150 million pounds of new equity and a 175 million pound issuance of bailin debt known as MREL.

The equity raise was led by Metro39;s largest shareholder, Gilinskiowned Spaldy Investments, which contributed 102 million pounds. Spaldy will become the controlling shareholder once the transaction completes, Metro said, with a 53 stake.

The opportunity to become the bank39;s major shareholder is driven by my belief in the need for physical and digital banking underpinned by a focus on exceptional customer service, Gilinski said in a statement.

The deal also involves a restructuring of its debts that will extend the maturity of its borrowings, with holders of a 250 million pound Metro Bank tier 2 bond due in…