Northern Rock CEO steps down earlier than planned
Northern Rock PLC's chief executive is stepping down immediately rather than staying on until February.
By Agencies |
LONDON: Northern Rock PLC's chief executive is stepping down immediately rather than staying on until February, the troubled mortgage lender said on Thursday.
Adam Applegarth, who has been with the company for 24 years, also will cease to be a director and an employee, the company said.
Andy Kuipers succeeds him as chief executive. In November, Northern Rock had said Applegarth would stay on until the end of a second phase of its strategic review. His financial settlement ``will pay him substantially less than the amount which he would otherwise have been due'' because of the company's failure to protect itself from the U.S. prime lending crisis, Northern Rock said.
Applegarth became chief executive in 2001. His compensation last year totaled 1.36 million pounds (euro1.89 million; US$2.78 million).
Northern Rock, which was dropped from the list of FTSE-100 companies Wednesday, added that it is continuing discussions with the Virgin Consortium about a proposed takeover, but is also talking to other parties.
``Northern Rock emphasises that there can be no certainty as to the outcome of these discussions,'' the company said.
Northern Rock shares fell nearly 7 percent to 92.6 pence (euro1.29; US$1.89) on the London Stock Exchange by midday.
Northern Rock ran into trouble in September when short-term money markets dried up following the collapse of the U.S. subprime mortgage market. Heavily reliant on funding from those markets, Northern Rock approached the Bank of England for an emergency loan.
News of the Bank of England's action scared depositors, who lined up outside branches to retrieve their savings. To stop the run, the government announced it would guarantee all personal funds held by the lender up to 35,000 pounds (US$70,900).
The Virgin consortium proposes to re-brand Northern Rock as part of the Virgin Money business and take a 55 percent stake in the bank. It has said it would repay 11 billion pounds (US$22.7 billion) of the Bank of England debt immediately.
Northern Rock identified one other party with which it was negotiating: the Olivant investment group.
Olivant's proposes that it take over management of the mortgage lender in return for a 15 percent stake, developing the company as ``a strong, independent brand'' under the Northern Rock name. The outstanding value of a series of loans from the Bank of England would be repaid by 2009, it added.
Olivant chief Luqman Arnold, a buyout veteran, has said he was confident his proposal would win favor with the government and shareholders.
Adam Applegarth, who has been with the company for 24 years, also will cease to be a director and an employee, the company said.
Andy Kuipers succeeds him as chief executive. In November, Northern Rock had said Applegarth would stay on until the end of a second phase of its strategic review. His financial settlement ``will pay him substantially less than the amount which he would otherwise have been due'' because of the company's failure to protect itself from the U.S. prime lending crisis, Northern Rock said.
Applegarth became chief executive in 2001. His compensation last year totaled 1.36 million pounds (euro1.89 million; US$2.78 million).
Northern Rock, which was dropped from the list of FTSE-100 companies Wednesday, added that it is continuing discussions with the Virgin Consortium about a proposed takeover, but is also talking to other parties.
``Northern Rock emphasises that there can be no certainty as to the outcome of these discussions,'' the company said.
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Northern Rock shares fell nearly 7 percent to 92.6 pence (euro1.29; US$1.89) on the London Stock Exchange by midday.
Northern Rock ran into trouble in September when short-term money markets dried up following the collapse of the U.S. subprime mortgage market. Heavily reliant on funding from those markets, Northern Rock approached the Bank of England for an emergency loan.
News of the Bank of England's action scared depositors, who lined up outside branches to retrieve their savings. To stop the run, the government announced it would guarantee all personal funds held by the lender up to 35,000 pounds (US$70,900).
The Virgin consortium proposes to re-brand Northern Rock as part of the Virgin Money business and take a 55 percent stake in the bank. It has said it would repay 11 billion pounds (US$22.7 billion) of the Bank of England debt immediately.
ADVERTISEMENT
Northern Rock identified one other party with which it was negotiating: the Olivant investment group.
Olivant's proposes that it take over management of the mortgage lender in return for a 15 percent stake, developing the company as ``a strong, independent brand'' under the Northern Rock name. The outstanding value of a series of loans from the Bank of England would be repaid by 2009, it added.
ADVERTISEMENT
Olivant chief Luqman Arnold, a buyout veteran, has said he was confident his proposal would win favor with the government and shareholders.
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