The UK government is selling Northern Rock,
the unsuccessful mortgage lender that was nationalised in 2008, to
Virgin Money, the banking arm of Richard Branson’s Virgin empire,
for £747m ($1178.98m).
The sale of Northern Rock is expected to be
completed on 1 January 2012.
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Following the sale Northern Rock will rebrand
as Virgin Money.
Under the terms of the deal, the government
will receive £747m in cash on the closing of the sale, and the
amount may subsequently rise to a total of £1bn in the future.
UK Finance Minister George Osborne has
announced in a statement, “The sale of Northern Rock to Virgin
Money is an important first step in getting the taxpayer out of the
business of owning banks.”
Osborne added that the sale of Northern Rock
to Virgin Money “will increase choice on the high street for
customers, and safeguards jobs in the North East.”
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By GlobalDataThere will be no additional compulsory
redundancies for at least three years, it has been announced.
The government said it had no plans to sell
Northern Rock (Asset Management), which still owes the Treasury
£21bn.
Virgin Money plans to establish a new
headquarters in Newcastle, where Northern Rock is based.
If Virgin Money sells or lists Northern Rock
on the stock exchange in the next five years, it will have to pay
the UK government an additional £50m to £80m.
