By Megan Davies
DETROIT (Reuters) - A Richard Branson-led consortium bidding to acquire ailing British bank Northern Rock NRK.L plans to rapidly rebuild it, consortium member Wilbur Ross said on Sunday.
Ross, a billionaire investor known for buying and turning around distressed companies, said he would be a "very major equity investor" in the consortium although he declined to specifically state his stake.
"Branson is not a great one for shrinking things - he's a great one for building things. The idea would be to build it up as rapidly as we could," Ross told the Reuters Autos Summit in Detroit.
Ross said it would be renamed Virgin Money and build its deposit base, after falling into trouble because it had been too dependent on securitizations and commercial paper -- markets which dried up when the subprime crunch hit.
Under the Virgin proposal, the consortium would immediately repay a significant proportion of a loan from the Bank of England (BoE), the consortium has previously said. Ross said the total owed to the Bank of England had been estimated likely to reach 24 billion pounds by the end of the year.
A rival proposal for Northern Rock was put forward by Olivant, a team led by veteran troubleshooter Luqman Arnold, which plans the "prompt repayment" of loans from the BoE and would subscribe for a minority stake in the company.
Ross said he thought any bid for Northern Rock would have to repay a large amount of the money owed to the BoE to succeed. Any deal that did not pay back the funds would probably run into regulatory problems on grounds that the government was subsidizing a bank, he said.
Ross, known for restructurings in the steel, textile and coal industries, is also betting on U.S. mortgages. Continued...
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