Northern Rock Gets Injunction On Memo

by Jason Gorringe, Tax-News.com, London

15 November 2007

A further twist in the Northern Rock saga has seen the bank obtain an injunction to prevent a confidential memorandum sent to parties with a potential interest in all or part of the Company from being further published, following its leak to a newspaper group, and subsequent publication on a website controlled by that group.

Northern Rock announced in a statement that:

"In order to protect the integrity of the information which has been provided to potential purchasers and to help ensure it can implement its strategic review in a way designed to achieve the best outcome for the Company and its stakeholders, including shareholders, creditors, customers and employees, the Company has obtained an injunction restricting publication of the information contained in the memorandum."

It continued:

"The Company believes that further speculative reporting based on the illustrative information in the memorandum may jeopardise the complex discussions and negotiations taking place in connection with its strategic review."

"It has been reported that the memorandum included certain illustrative transaction structures and financial information prepared in connection with the Company's strategic review. As was made clear by the memorandum the financial information was prepared solely to illustrate the potential financial impact of these transaction structures on the Company's business."

"None of the information reported as being in the memorandum should be viewed as guidance to the market as to future outcomes of the strategic review or as an accurate representation of future results. The memorandum was not prepared with a view to public disclosure or in compliance with rules, guidelines or policies relating to public disclosure."

And concluded:

"Announcements regarding the outcome of the strategic review will be made as and when appropriate and any information that is material will be published at that time. There can be no certainty that the discussions taking place with interested parties will lead to an offer for the Company or for all or any part of its business."

"The Company confirms 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."

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