CIC in talks over potential investment in Northern Rock
China Investment Corp. (CIC) is being courted by British entrepreneur Sir Richard Branson as a potential partner for Virgin Money in a bid for UK lender Northern Rock. The bank, which received a GBP1.4 billion government bailout in 2008, is tipped to sell for around GBP1 billion, The Telegraph reported.
Virgin Money has already secured financial support from The Carlyle Group, General Altantic and the Universities Superannuation Scheme. US tycoon Wilbur Ross has also pledged GBP500 million to the bid.
The British government said in the summer that it would sell Northern Rock, which has 70 branches. A number of major UK banks, including Lloyds and RBS, are in the process of divesting part of their branch networks in response to rulings by the European Commission.
Should CIC participate in the acquisition of Northern Rock, it would be the first large-scale Chinese investment in UK retail banking. CIC's financial assets include stakes in Blackstone Group, Morgan Stanley and Visa. The paper value of these holdings has taken significant hit in recent years due to the global financial crisis and subsequent financial markets uncertainty.
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