After six month running British bank Northern Rock' s auction, one of the most serious candidates, Olivant Investment group, announces a withdrawal. The problems in the credit markets caused by US subprime mortage financial crisis induced Northern Rock, situated at Regent Centre near Newcastle upon Tyne to proclaim a bankruptcy, on September 14, 2007. Olivant, as a nominal candidate was expected to increase the rise of declining Northern Rock up to the 650 million pounds by issuing new shares in the bank. The current value of the bank has plunged to less than 0,53 billion pounds, that is less than a tenth of its initial last year. Luqman Arnold, current chairman of Olivant Investment group declared that despite of intensive work they had been unable to formulate a value creation proposal, which met their investment criteria, while respecting (the British government's) proposed financing terms and the interests of other stakeholders in the company. Just few minutes after a surprising decision, a leader of Virgin consortium, Richard Branson advanced its plans, according that, the bank would gain an injection of 1.25 billion pounds, whilst coming under the Virgin co. Following Brian Pitman, the potential bank leader acclaim, Virgin just 'seeks to stabilize the company and rebuild it as a trusted and thriving institution under its brand with a long-term future'. On the other side, the question, if Northern Bank should be nationalized is still unclear. Despite of last month' s government decision to keep the Northern Rock in a private sector, one of the real possibilities is to buy a share, having lent the bank about 25 billion pounds in emergency funding to keep it afloat.
Edited by: Katarina Bosanska
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