Co-op Group plans asset sales to reduce £1.3bn debt Richard Pennycook, the group's finance director, said that the food business would get the full "couple of hundred a million a year" investment programme planned for the next few years. The money is available as a result of the group injecting £462m into the bank rather than the initial £1bn planned. Mr Pennycook also confirmed that, for the first time in its history, the group will have a London office, which it will locate next to the bank. However, its recently opened Manchester head office will remain its headquarters. Speaking at the 169-year-old mutual's half-year general meeting at its headquarters in Manchester on November 2, Mr Sutherland said that the organisation "urgently" needs to reduce its debt. According to sources, the stark words, coming less than a week after the confirmation of a £1.5bn plan to recapitalise Co-op's banking arm, are intended to inject some financial realism into an organisation that has struggled from over-expansion. Mr Sutherland, who took control of the mutual from May 1, said that in order to reduce the current £1.3bn bank debt, it must look to productivity, efficiency, and selling some of its assets. Divisions which will not be sold include its food retail business and its pharmacy business, it is understood. Non-core arms are thought to include the funeral business and its security business, but Mr Sutherland would not comment further. It would be the first time that the group chose to sell assets to reduce its own debt. The £219m sale of its life insurance arm to Royal London, and the ongoing sale of its general insurance arm, were designed to aid the bank, which was revealed to be in difficulties last year. In his speech to members yesterday, Mr Sutherland said that the organisation has lost it way, and, referencing the founding Rochdale Pioneers, that its recent controversial history was not what the organisation was set up for. He went on to say now was the time to be radical and to reform the organisation. The outgoing group chairman, Len Wardle, said that Mr Sutherland will be running a review of the direction of the Co-op's dividend in the long term. As a result of its loss before tax of £559m in the six months to June, and the capital involved in the bank recapitalisation plan, no dividend will be paid this year.