Northern Rock - Nationalisation looms closer
14 January 2008
Northern Rock’s shareholders meet tomorrow in a last ditch attempt to head off Nationalisation.
Shareholders are set to vote on whether to restrict the ability of the company’s board to sell assets without seeking their permission.
Robin Ashby, of the Northern Rock Small Shareholders’ Group says “There is an executive management ready to come into the company... and I do not see nationalisation as either a sensible solution or indeed one that needs to be done."
The meeting will be hotly watched by the Treasury as the shareholder’s action is seen as potentially hostile to the interests of taxpayers.
The Government's attempt to rescue the bank is threatening to cost each taxpayer a staggering £1,800 – through loans by the Bank of England and guarantees to other lenders made by the Treasury.
While the Government has stressed it would prefer a a private sector solution some financial commentators are now predicting the bank will be nationalised by the end of the month.
News that Northern Rock could soon be nationalised has led to a 7% fall in share price.
SaveBorrowSpend Philippa Adam
