Northern Rock: Nationalisation averted?
20 January 2008
Just days ago it seemed nationalisation was definitely on the cards for Northern Rock but now a private sector package could rescue the stricken lender at the twelfth hour.
Currently Sir Richard Branson's Virgin Group and the Olivant Group are the front runners to take over Northern Rock and the Government is preparing plans which could see the billions of pounds of state loans made to the lender converted into bonds.
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There is speculation Sir Richard may have secured the deal during talks the Prime Minister in China at the end of the week, but both sides have strongly rejected the rumours.
The Sunday Times has reported today that Virgin may be prepared to cut is proposed stake in Northern Rock from 54% to 45% a move that would certainly appeal more to existing shareholders.
Chancellor Alistair Darling is due to make a statement in the Commons on Monday to outline future plans for the lender.
SaveBorrowSpend Philippa Adam
