Northern Rock board re-shuffle

Adam Applegarth, chief executive of crisis-torn Northern Rock has resigned.

Furthermore, non-executive directors Sir Derek Wanless, Nichola Pease, Adam Fenwick and Rosemary Radcliffe are all to step down with immediate effect. Executive directors David Baker, Keith Currie and Andy Kuipers will also step down from the board although they will remain as managers with the company.

Mr Applegarth has been under severe pressure to resign since September when it was revealed that the bank had been forced to ask the Bank of England for emergency funding.

In a statement to the stock market, the bank’s chairman Bryan Sanderson said Mr Applegarth will stay until the end of January as his participation in the next phase of the strategic review is important, not least due to his extensive knowledge of the business and his ability to lead the process during this difficult period.

Mr Applegarth’s resignation came as the deadline closed for bids for the lender at the centre of one of the UK’s worst banking crises in over a century.

Those who have previously expressed an interest in Northern Rock include private-equity groups, JC Flowers, Cerberus, Blackstone and Apollo. A consortium led by Virgin boss, Richard Branson, has also joined a growing list of those expressing an interest in the bank.

Furthermore, Luqman Arnold, the City stalwart and former Abbey chief executive, launched a proposal to rescue Northern Rock just last week.

Northern Rock’s advisers have been considering initial proposals this weekend for full or partial takeovers.

It has been announced that Chancellor Alistair Darling will this week confirm that rescue loans already made to Northern Rock will be extended to any successful bidder for the troubled lender.

Detailed talks are being held between Treasury lawyers and Brussels officials over the way the Bank of England’s multi-billion pound loan rescue package can be continued without breaking European rules on state aid.

The Treasury confirmed it would be making a statement on desirable outcomes for Northern Rock this week, but would not divulge details.

Discuss this in the Finance Markets forums

Story link: Northern Rock board re-shuffle