Virgin To Bail Out Northern Rock

Led by Richard Branson, Virgin will repay 11 billion pounds ($22.6 billion) to the Bank of England as part of the deal. The consortium, which also includes WL Ross, Toscafund and First Eastern, plans to inject $1.3 billions pounds into Northern Rock. Half the funding will be paid by the consortium and half will be raised through a rights issue at 25 pence per share. The consortium will also inject Virgin Money, the Virgin financial services company, into the bank, with an implied valuation for Virgin Money of 250 million pounds. RAB Capital and SRM Global, the lender's top two investors, wants to convene a shareholder meeting to discuss the sale of all or part of the bank, according to the reports. It is also being reported that investor Warren Buffett has been in talks to possibly join a bidding team for Northern Rock, that could include J.C. Flowers, Cerberus Capital Management, Olympus Partners and Five Mile Capital.