The Rock in discussions over private sale
January 29, 2008
According to the prime minister, Gordon Brown, troubled bank Northern Rock is now is talks relating to a possible private sale. However, the prime minister also added that the possibility of nationalisation, a move that was revealed as a possibility recently by the government, had not been ruled out. According to recent reports Gordon Brown has approved a plan that will result in the likelihood of a private sale for the bank, which became the first victim of a run on a British Bank in nearly 150 years recently.
The proposals, which are being backed by Gordon Brown, are said to have been put together by bankers Goldman Sachs. One of the proposals is to turn billions of pounds of state loan that were made to Northern Rock into bonds that will then be sold off. The bonds would remain in the public sector until the turmoil in the financial markets has died down, and they will then be sold gradually to investors every few months.
Gordon Brown stated: “Now we’ve been presented with a report that we commissioned from Goldman Sachs and it gives us a number of options for the future. It’s right therefore to have the discussions with the private sector. All options, including public ownership, on the road to moving the firm back into the private sector are on the table and are available to the government.”
Sir Richard Branson’s company Virgin is one of those bidding to take over the bank, and Branson stated: “I’m still confident that our bid is good. And I personally believe it’s the best bid on the table, it’s the best option for Northern Rock. I believe it’s the best option because we would re-brand it the Virgin Bank, which is a very strong brand.”
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