Northern Rock To Make Extra Push In Attempt To Find Buyer

Mon, 17 Sep 2007

UK mortgage lender Northern Rock is set to increase its efforts in finding a suitable buyer this week after the Bank of England made it clear over the weekend that its emergency credit line would not be removed from the bank in the event of a takeover .

According to the Financial Times, the central bank's move had prompted Northern Rock and its advisers to launch a fresh push for a 'commercial solution' that would allow the group to be sold as a going concern.

"We hae agreed that any bidder would be able to take on the facility for any unexpired term left," a spokesman was quoted as saying.

The Bank of England is also planning to publish the full terms of the Northern Rock bailout in response to criticism that it should not have intervened.

Northern Rock revealed on Friday that it had sought emergency funding from the Bank of England after a sudden tightening of credit market conditions over the summer had left it short of funds, resulting in share price slump by 30 per cent on Friday.

As a result, the Newcastle-based bank has become the first major British bank in more than 30 years to have panicked customers queueing outside its branches to withdraw their money .

Savers have so far withdrawn a staggering 2bn in cash from Northern Rock – around 8 pct of its total deposits,according to the FT.
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