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| Version 3 | Version 4 |
|---|---|
| PM confirms Northern Rock talks | PM confirms Northern Rock talks |
| (20 minutes later) | |
| Talks are taking place to secure a private sale of Northern Rock, the Prime Minister has confirmed. | Talks are taking place to secure a private sale of Northern Rock, the Prime Minister has confirmed. |
| Speaking in Shanghai, on the latest leg of his visit to China, Gordon Brown said he had not ruled out the possibility of nationalising the bank. | Speaking in Shanghai, on the latest leg of his visit to China, Gordon Brown said he had not ruled out the possibility of nationalising the bank. |
| But it is thought he has approved a plan which would make a sale to the private sector more likely. | But it is thought he has approved a plan which would make a sale to the private sector more likely. |
| One proposal is to turn the billions of pounds of state loans made to Northern Rock into bonds, which would be sold. | One proposal is to turn the billions of pounds of state loans made to Northern Rock into bonds, which would be sold. |
| BBC business editor Robert Peston says bankers Goldman Sachs have come up with the scheme which has won the prime minister's backing. | BBC business editor Robert Peston says bankers Goldman Sachs have come up with the scheme which has won the prime minister's backing. |
| The taxpayer will still have complete liability and a private company is going to be invited to take over the bank for a very small price and use it as a licence to print money Vince Cable, Lib Dem MP Nationalisation less likely | The taxpayer will still have complete liability and a private company is going to be invited to take over the bank for a very small price and use it as a licence to print money Vince Cable, Lib Dem MP Nationalisation less likely |
| It would mean the bonds would stay on the public sector balance sheet until conditions improve in financial markets. | It would mean the bonds would stay on the public sector balance sheet until conditions improve in financial markets. |
| They would then be sold to investors in small parcels every few months. | They would then be sold to investors in small parcels every few months. |
| Speaking in China, Mr Brown said: "Now we've been presented with a report that we commissioned from Goldman Sachs and it gives us a number of options for the future. | Speaking in China, Mr Brown said: "Now we've been presented with a report that we commissioned from Goldman Sachs and it gives us a number of options for the future. |
| "It's right therefore to have the discussions with the private sector. | "It's right therefore to have the discussions with the private sector. |
| "All options, including public ownership, on the road to moving the firm back into the private sector are on the table and are available to the government." | "All options, including public ownership, on the road to moving the firm back into the private sector are on the table and are available to the government." |
| Private bids | Private bids |
| He confirmed that the Chancellor, Alistair Darling, would make a statement in the Commons on Monday. | |
| The BBC's business editor says sales of the bonds would take place as and when financial institutions regain their appetite for such investments. | The BBC's business editor says sales of the bonds would take place as and when financial institutions regain their appetite for such investments. |
| And they would be guaranteed by the government, rather than by a private sector insurer. | And they would be guaranteed by the government, rather than by a private sector insurer. |
| As a result, the Treasury would therefore be funding Northern Rock to the tune of tens of billions of pounds for as long as five years, even if it remains in the private sector. | As a result, the Treasury would therefore be funding Northern Rock to the tune of tens of billions of pounds for as long as five years, even if it remains in the private sector. |
| Two consortiums, led by investment groups Virgin and Olivant, are at the forefront of attempts to buy the bank. | Two consortiums, led by investment groups Virgin and Olivant, are at the forefront of attempts to buy the bank. |
| Robert Peston's blog | Robert Peston's blog |
| Virgin boss Sir Richard Branson said he had a "winnable package" to see his bid for Northern Rock bank succeed. | Virgin boss Sir Richard Branson said he had a "winnable package" to see his bid for Northern Rock bank succeed. |
| Sir Richard is in Shanghai where he is accompanying Mr Brown as part of Britain's delegation. | Sir Richard is in Shanghai where he is accompanying Mr Brown as part of Britain's delegation. |
| He said: "I'm still confident that our bid is good. And I personally believe it's the best bid on the table, it's the best option for Northern Rock. | He said: "I'm still confident that our bid is good. And I personally believe it's the best bid on the table, it's the best option for Northern Rock. |
| "I believe it's the best option because we would re-brand it the Virgin Bank, which is a very strong brand." | "I believe it's the best option because we would re-brand it the Virgin Bank, which is a very strong brand." |
| Deal deadlines | Deal deadlines |
| But the Liberal Democrats' treasury spokesman, Vince Cable, said he would have serious concerns about any private sale of Northern Rock along the lines being proposed. | But the Liberal Democrats' treasury spokesman, Vince Cable, said he would have serious concerns about any private sale of Northern Rock along the lines being proposed. |
| He said: "The taxpayer will still have complete liability and a private company is going to be invited to take over the bank for a very small price and use it as a licence to print money." | He said: "The taxpayer will still have complete liability and a private company is going to be invited to take over the bank for a very small price and use it as a licence to print money." |
| David Greene, a lawyer who represents some of Northern Rock's shareholders, said it was "early days" and that he was looking for "a bit more detail" as to what the prospects were for the bank, before any conclusions could be drawn. | |
| The BBC's business editor has said an announcement is expected to be made to the Stock Exchange on Monday morning. | The BBC's business editor has said an announcement is expected to be made to the Stock Exchange on Monday morning. |
| Any deal would have to be agreed by mid-March, which is the expiry date of the European Commission's blessing for the public sector support currently being provided to the Rock. | Any deal would have to be agreed by mid-March, which is the expiry date of the European Commission's blessing for the public sector support currently being provided to the Rock. |