To raise the capital, the Co-op Group has agreed to support an exchange offer which will invite bond holders to exchange their bonds for an issue of fixed-income instruments by the Group and an issue of new shares by the bank.
A spokeswoman from the Co-operative Bank said: “The deal will not affect Platform; it is very much business as usual.”
In a statement the Co-operative said the comprehensive plan would significantly strengthen its capital base and allow it to move forwards on a “stable footing”.
Euan Sutherland, chief executive of The Co-operative Group, said: "This announcement is good news for The Co-operative Group, The Co-operative Bank, its customers and our members.
“We have put in place a detailed and comprehensive solution to meet the current and longer-term capital requirements of the bank.
“In doing so we have agreed a plan to ensure its future. We have discussed this plan in full with the regulator.”
Sutherland said that investors in the bank’s subordinated capital securities are also being asked to support the bank by participating in the exchange which will see them own a “significant” minority stake in the bank allowing them to share in its “transformation”.
To raise capital, holders of £370m of permanent interest bearing shares issued by the Co-op and Britannia Building Society before its takeover are expected to have their coupons cancelled, effectively wiping out their value.
Typically owners of PIBs are pensioners who are attracted by the steady guaranteed income. However the exchange could see them left with shares which will cut the value of their holding in the mutual by half.
Dean Mirfin, group director of retirement income adviser Key Retirement Solutions, said: “Pensioners yet again face the prospect of another hit on their finances. Unfortunately many will struggle to find good secure sources of reliable income.
"Long-term bonds will typically provide higher levels of income than shorter term alternatives however at the moment the best rate even for a five year bond is below 3%.
"The reality for many is that returns on “safe” investments continue to be consistently poor. The alternatives are either to look at more risk or alternatively use some of the value in the home to supplement retirement income.”