27-11-2007
Branson makes personal contribution in Rock rescue deal
As part of the recently agreed rescue deal for Northern Rock, Sir Richard Branson is to contribute a percentage of his own personal wealth.
Under the terms of the Virgin proposal, Northern Rock would be refinanced with £1.3 billion of funds from Virgin and, although it will be necessary for the company to borrow a total of £11 billion, Sir Richard has pledged to inject £200 million of his own funds into the deal.
Although an agreement has not yet been reached, Virgin has now been confirmed as the preferred bidder.
However, despite this status, Rab Capital, one of the second largest holders of shares in Northern Rock, has confirmed it will seek to oppose the bid, as it believes it to be too low.
"This stock is not for the faint-hearted and the range of outcomes for shareholders is very wide," said Nic Clarke, an analyst at stockbrokers Charles Stanley.