Due to a technical problem on Wednesday Jan
16, we are upgrading the news management system by a Canadian
software company, which will be
completed in coming days.
It has taken longer than
anticipated. That is one of the drawbacks of outsourcing. C'est
la vie - even Google News updating falls behind at times!
News Headlines to Jan 16 2008
Today's News Links
Click for Monday's stories and links from Jan 17 2008
outlines plans to convert Northern Rock's £25bn Bank of England loan
into State-guaranteed bonds; Northern Rock shares surge over 36%
UK Chancellor Alistair Darling has outlined plans to convert Northern
Rock's £25bn Bank of England loan into bonds before selling them to
The bonds will be State-guaranteed to speed up a private sale of the
embattled lender that was rescued from collapse in September 2007.
However, there is no certainty of a private sale and the bank may
be nationalised for a temporary period.
The UK government will also guarantee savers' deposits. Northern Rock
shares jumped 42% after the news, rising by 26.5 pence to 91 pence. At lunch
time, the share price was up over 36% on an otherwise bleak day for the
Darling plans to make a statement to the House of Commons at 1530 GMT.
Bidders have until 4 February to come forward with rescue proposals based
on the UK Treasury's plans.
The scheme was proposed by bankers Goldman Sachs and was given the
approval by Prime Minister Gordon Brown over the weekend.
Northern Rock debt has in
effect been converted into government bonds or
That would mean the taxpayer would be exposed to Northern Rock for a much
longer period than planned, for five years or longer, analysts claim.
The UK Treasury's plan still needs to be approved by the Financial Service
Authority (FSA), and comply with the European Commission's rules on state aid
Northern Rock's Bank of England loan facility will be extended until 17
March to allow time to explore the proposed financing structure with
Northern Rock and interested parties.
Currently, there are three front-runners: Olivant, the consortium led
by Virgin, and a standalone plan being developed by the bank's
Reports claim that Richard Branson's Virgin Group was
preparing to make an improved offer for the beleaguered lender.
According to the Sunday Times, Virgin is preparing to cut its proposed
stake in Northern Rock from 54% to 45%. Such a move would allow existing
shareholders more room to share in any recovery in the price of Northern
On Saturday, Sir Richard said he had a "winnable package" to ensure the
success of his bid for Northern Rock.