Olivant’s bid details for Northern Rock announced
by Richard Kilner
One of the bidders for struggling bank Northern Rock has made plain the detail of its offer.
Olivant has declared today that it will pay back £15bn of the Bank of England long at once.
The consortium is led by City big hitter and former Abbey chief Luqman Arnold.
Under Olivant’s plans there would be no rebranding of the bank, which would retain the Northern Rock name. In addition to the immediate repayment, the entirety of the Bank of England loan (which is speculated to amount to approximately £25bn) would be fully repaid by 2009.
Until the loan had been paid back in full Arnold would hold the position of executive chairman at the bank.
Funds of £800m would be raised from equity capital.
The Olivant consortium has non-binding support from stakeholders with 23% of Northern Rock to take up the rights issue at the present market value.
The offer’s detail has emerged following rumours that another potential bidder, US private equity firm JC Flowers, had decided not to go through with its desire to buy the bank.
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