The streamlining of the board is intended to assist a smooth and rapid decision making process around the strategic review of the company’s options, which is currently in progress.
Non Executive Directors
John Devaney and Simon Laffin have agreed to join the board as non-executive directors effective upon each of them obtaining approval from the FSA under its approved persons regime.
Devaney is the chairman of National Air Traffic Services (NATS) and also the chairman of Telent plc.
Laffin is an adviser to CVC Capital Partners and was previously the chief financial officer and property director of Safeway Plc.
Chairman Bryan Sanderson said: “I am delighted to welcome John Devaney and Simon Laffin to the Board. I believe they have the right experience to help Northern Rock through its ongoing strategic review.”
Sir Derek Wanless, Nichola Pease, Adam Fenwick and Rosemary Radcliffe will retire from the board as non-executive directors with immediate effect.
Sir Ian Gibson and Michael Queen continue to serve as non-executive directors.
Sanderson said: “I would like to thank the retiring Non Executive Directors for their efforts over a number of years and their commitment during the very difficult circumstances of the last few months. Special thanks are due to Rosemary Radcliffe’s contribution during a period of ill-health. I wish her a speedy recovery.”
Executive Directors
Adam Applegarth, chief executive, has tendered his resignation and it has been accepted by the board subject to him continuing as a board director and chief executive throughout the second phase of the strategic review process, which is scheduled for completion no later than end of January 2008.
Sanderson said: “Adam’s participation in the next phase of the strategic review is important, not least due to his extensive knowledge of the business and his ability to lead the process during this difficult period.”
David Baker, Keith Currie and Andy Kuipers are standing down as board directors, but remain officers of the company and continue to have responsibility for their full range of duties.
Dave Jones continues to serve on the board as finance director.
The board also confirmed that, as part of its review of its strategic options, the company has received indicative expressions of interest covering a range of options for the business. It currently expects to receive further expressions of interest in the next few days.
The company's advisors have begun discussions with interested parties to clarify their proposals in order to allow the board to consider and identify the most appropriate course of action for the company and its stakeholders. At the same time, Northern Rock and its advisors continue to be engaged in discussions with refinanciers to explore refinancing and/or reorganisation solutions for the company.
The proposals received by the company are of two types:
- proposals to invest in the company (including through an injection of assets as well as new capital); and
- proposals to acquire parts of the business or assets of the company.
The value to shareholders from any of the proposals (and indeed any of the other strategic options available to the company) remains highly uncertain and will be dependent, among other things, on when and if there is an improvement in market conditions including access to liquidity and the value created, if any, from the run off of the assets and liabilities remaining in the company following any disposal of all or part of its business. Implementation of any such proposal will also require the approval of the Tripartite Authorities, acting in accordance with their publicly stated objectives.
The company continues to consider these proposals and the other options which may be available as part of its strategic review. As previously announced, the strategic review will be completed by February 2008. Northern Rock emphasises that there can be no certainty that the discussions with interested parties will lead to an investment in or offer for the company or for all or any part of its business or that any such offer will be implemented.
Continuing HM Treasury Guarantee Arrangements
The company confirmed that the existing deposit guarantee arrangements announced by HM Treasury and the revised facilities agreed with the Bank of England announced on 9 October 2007 remain in place. In particular, these guarantee arrangements will protect all retail deposits held with Northern Rock regardless of the amount deposited and apply to all existing, re-opened and new retail accounts. HM Treasury has announced that these arrangements to protect depositors of Northern Rock will remain in place during the current instability in the financial markets.
