Goldman hired to aid Nothern Rock rescue
LONDON (Reuters) - Investment bank Goldman Sachs has been asked to use its global reach to help put together a financing package to rescue ailing bank Northern Rock, a UK Treasury spokesman confirmed on Saturday.
The spokesman added that the package would be available to any buyer and the two main bidders -- Virgin Group and Olivant -- would be treated on an equal footing.
Olivant had said on Thursday it would remain in talks to buy Northern Rock after being told it would be treated on a equal footing to Virgin Group, according to a person familiar with the matter.
Fears that Olivant would withdraw to leave just one interested suitor and news of a 281 million pound ($567.5 million) hit to profit from its exposure to the credit crisis sent shares in Northern Rock tumbling 13 percent to 86 pence on Thursday.
Virgin has been in "accelerated" talks with Northern Rock advisers after being picked as preferred bidder. Olivant will now be treated on an equal basis in all respects, including gaining access to banks providing financing for a deal.
The Treasury spokesman said the U.S. bank's fees would be paid by Northern Rock.
The Treasury spokesman was responding to a report in the Financial Times on Saturday which said the move was seen as a last-ditch attempt to find a private-sector solution to the troubled bank's crisis.
Both Virgin Group and Olivant are struggling to find the financing to take over the bank and repay 25 billion pounds ($50.70 billion) of tax payer-backed loans, the FT said.
UK Chancellor of the Exchequer Alistair Darling on Friday approved the involvement of Goldman Sachs -- the government's advisers in the sale -- in the hope it will help find backers for a private sale and speed up the process, the newspaper added.
Northern Rock declined to comment.
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