U.K. to Receive Extra $834 Million on Northern Rock, Mortgages

The U.K. government will receive a further 538 million pounds ($834 million) from the sale of mortgages and Northern Rock Plc to Virgin Money Holdings (U.K.) Ltd.

The Treasury sold 465 million pounds of Northern Rock (Asset Management) Plc mortgages to Virgin Money, U.K. Financial Investments Ltd. said in a statement today. Virgin also paid 73 million pounds in addition to 747 million pounds previously agreed for the acquisition of Northern Rock Plc, based on a final valuation of assets, UKFI said.

“These transactions are consistent with UKFI’s objective to manage the government’s investments commercially and to create and protect value for the taxpayer as shareholder,” said Keith Morgan, head of wholly owned investments at UKFI, which manages the government’s bank stakes.

Northern Rock was nationalized in February 2008 after suffering the first run on a U.K. bank in more than a century. Virgin Money agreed to buy Northern Rock Plc in November, leaving the taxpayer with stakes in Royal Bank of Scotland Group Plc, Lloyds Banking Group Plc (LLOY) and other mortgage assets.

To contact the reporter on this story: Jon Menon in London at jmenon1@bloomberg.net

To contact the editor responsible for this story: Jon Menon at jmenon1@bloomberg.net

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