Northern Rock – talks are at early stage

Northern Rock has confirmed that it is working with “a number of potentially interested parties” on options for its future. The crisis-torn bank has today said that discussions are at an early stage and it is not divulging the number of bidders or their identity.

The bank added that it will continue to work with potentially interested parties to understand their preliminary proposals more fully.

Northern Rock’s statement comes after news that a consortium led by Virgin boss, Richard Branson, had joined a growing list of those expressing an interest in the bank.

The consortium led by Sir Richard Branson includes U.S. insurance group AIG, buyout firm WL Ross, investment group Toscafund and First Eastern, the Hong Kong-based investment group.

It has been revealed that Virgin has been approached by Barclays, HSBC, Bank of America and Citigroup to say they are prepared to offer debt finance should a deal occur.

Other suitors include private-equity groups, JC Flowers, Cerberus, Blackstone and Apollo. Hedge fund Jon Wood has taken a stake in the bank.

However, one of the major concerns for any buyer of Northern Rock is funding for the £100 billion loan portfolio. The bank has already borrowed nearly £13 billion from the Bank of England when it had to seek emergency funding.

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