Maverick British billionaire Sir Richard
Branson''s Virgin Group has put together an international consortium to rescue
troubled bank Northern Rock and rebrand it under the Virgin brand.
Rock relies on capital markets rather than deposits for new home loans and was
one of the hardest hit by rising credit costs, forcing it to seek emergency credit
from the Bank of England.
consortium, which included American International Group; Toscafund Asset Management,
a fund focusing on investments in the financial services industry; the First Eastern
Investment Group, a Hong Kong-based investment group; and WL Ross & Company,
founded by the billionaire investor Wilbur L. Ross has, however, stipulated that
it should not be forced to make a full takeover offer.
the recent past Investment bank Citigroup, which was appointed as an advisor to
Northern Rock in order to provide financing to potential suitors, has offered
to provide funding to potential buyers of Northern Rock even as advisors of the
ailing British bank are in talks with US buyout firms JC Flowers and Cerberus
over a rescue bid, sources familiar with the developments said.
month the Bank of England had offered Northern Rock emergency funding since September
14, amidst a credit market crunch. The mortgage lender is estimated to have drawn
about 8 billion pounds on the facility, at a penal interest rate.
said in an official statement late yesterday "A consortium led by Virgin
Group, has today submitted a non binding indication of interest to the board of
Northern Rock which, if consummated, will see the consortium inject substantial
new equity into Northern Rock."
proposal envisages that Virgin would take over the management under its retail-lending
brand Virgin Money, which provides credit cards, home loans and insurance services.
statement quotes Sir Richard as saying, "I believe that if we''re successful
we''ll be able to create an exciting new banking alternative for everyone in the
has yet to issue a formal response to the proposal.