Northern Rock sold to Virgin
Money
17 November 2011 Last updated at 09:39 GMT
http://www.bbc.co.uk/news/business-15769886
There will be no compulsory
redundancies beyond those already announced for at least three years
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Big Banking
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Northern Rock is being sold to Virgin Money for £747m, the government has
announced.
The bank was nationalised in 2008 following its near collapse at the onset of
the global credit crisis.
The government subsequently split the bank into two, Northern Rock plc, and
Northern Rock (Asset Management), into which was placed its bad debt.
Virgin is buying Northern Rock plc and has pledged no additional compulsory
redundancies for at least three years.
'Safeguards jobs'
Chancellor George Osborne said: "The sale of Northern Rock to Virgin Money
is an important first step in getting the British taxpayer out of the business of
owning banks.
"It represents value for money, will increase choice on the High Street for
customers, and safeguards jobs in the North East."
The sale of Northern Rock plc is expected to be completed on 1 January
2012.
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“Start Quote
It is a very positive outcome for the company following a significant
restructuring process”
End Quote Ron Sandler Northern Rock executive chairman
The government said it had no plans to sell Northern Rock (Asset
Management), which still owes the Treasury £21bn - the amount that was
injected into the old Northern Rock bank in the wake of its near collapse.
Virgin Money has pledged to establish a new headquarters in Newcastle,
where Northern Rock is based.
In addition to paying £747m on completion of the sale, the government said
Virgin Money was "expected" to pay an additional £50m within six months,
and then a further £150m.
If Virgin Money sells or lists Northern Rock on the stock exchange in the next
five years, it will have to pay the government an additional £50m to £80m.
Ron Sandler, Northern Rock executive chairman, said: "The return of
Northern Rock to the private sector has always been one of our key
objectives.
"We said that this would be done at the right time and when there was a
proposition in the best interests of taxpayers and other stakeholders.
"It is a very positive outcome for the company following a significant
restructuring process."