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back to newsroom22/02/2008 Temporary Public Ownership
Please Note: This article pre-dates the company restructure of 01 January 2010Ron Sandler, the new Executive Chairman of Northern Rock, and the other members of the new Board have held their first Board meeting following the Company having entered into a period of temporary ownership earlier today.
Commenting on his new role and challenges Ron said:
“I know these past months have been a turbulent time for everyone at Northern Rock, both for the staff and its loyal customer base. It is therefore of great importance to me and the new Board that as we go forward we create the stability to build a company operating on sound commercial principles that can be returned to the private sector, standing on its own two feet.”
On the appointments to the new Board, Ron said:
“This is a combined team of great experience, drawn from both within Northern Rock and outside organisations. As well as ensuring all important continuity, this is a team that will bring new ideas and new ways of working to Northern Rock to the benefit of everyone.”
Introduction
The Board of Northern Rock notes that the legislation under which all the shares in the Company have been acquired by the Treasury has come into effect and the Company has moved into a period of temporary public ownership. The Government has announced that during this period the Company will operate at arm’s length and on a commercial basis. The Government has stated that this legislation allows for the running of the bank and for the eventual transfer back into the private sector as soon as it is right to do so.
Customers
The Company will continue to be open for business as usual for its customers and the Government’s guarantee arrangements remain in place. Depositors’ money remains safe and secure.
Board and Management
Ron Sandler and Ann Godbehere have today joined the Board as the new Executive Chairman and the new Chief Financial Officer respectively. Mr Sandler and Ms Godbehere will work with the existing management team during this transitional period. In addition Philip Remnant, Tom Scholar and Stephen Hester have today joined the Board as non-executive directors, with Mr Hester filling the role of Deputy Chairman. Bryan Sanderson, Sir Ian Gibson, David Jones and Paul Thompson have each retired from the Board. Mr Jones has agreed to continue as part of the management team. Andy Kuipers will remain on the Board and will continue as Chief Executive. Simon Laffin, John Devaney and Laurie Adams will continue as non-executive directors. Michael Queen will be retiring from the Board but has agreed to stay on as a non-executive director for three months to help provide continuity.
Effect of Transfer Order
Share Transfers
All the shares in the Company have been transferred to the Treasury Solicitor, as nominee of the Treasury, by virtue of the
Northern Rock plc Transfer Order 2008 (the Transfer Order), which was made pursuant to the Banking (Special Provisions) Act
2008 and which came into effect at 00.01a.m. on 22 February. The listing of the Company’s ordinary and preference shares has
now been cancelled by the UK Listing Authority, trading of such shares on the London Stock Exchange has ceased and all shares
have been disabled in CREST. All other rights or entitlements to receive or subscribe for shares in the Company have been
extinguished by virtue of the Transfer Order.
Changes to Tier 1 Notes
If, during the period of temporary public ownership, the Company would otherwise have been obliged to issue shares under
the terms of the £200,000,000 7.053% callable perpetual core tier one notes or to holders of the £300,000,000 8.399% step-up
callable perpetual reserve capital instruments (together, the Tier 1 Notes) in order to satisfy entitlements to interest
payments