There was news on Friday that a consortium headed by billionaire Richard Branson’s Virgin Group Ltd. has offered to rescue Northern Rock PLC. The proposal is to inject cash into the struggling mortgage lender and rebrand it Virgin Money.
While this is only the first proposal put forward to rescue Northern Rock, if it goes through it could mean that Virgin Money is Newcastle United’s new corporate sponsor.
Virgin Group have submitted a proposal to rescue Northern Rock and rename it Virgin Money
Under the proposal, put forward by a consortium of Asian and U.S. investors led by Virgin, Northern Rock would be renamed Virgin Money in return for equity. Virgin’s offer is the first on the table for Northern Rock, following speculation about several potential bids from private-equity firms Apollo Management, Blackstone Group, Lone Star, J.C. Flowers & Co. and Cerberus Capital Management.
The only way out of the trouble Northern Rock got itself into was a buyout and the Newcastle based mortgage lender has been searching for a buyer since last month. In early September it issued a profit warning and announced it had requested emergency funding from the Bank of England, following the collapse of the sub prime mortgage market. Customers immediately panicked and put a run on the bank as they lined up to withdraw their deposits in early September.
If this deal goes through it looks like Virgin Money would pick up the sponsorship of Newcastle United. We think that would be a good deal for the Newcastle club since Virgin is a global brand and would seem to support Mike Ashleyâ€™s policy of making Newcastle United a successful global brand.
Wonder what the crest for Virgin Money will look like – should really make it blue so it matches in with Newcastle’s colors – let’s get Branston on the phone 😀