Virgin Money takes market plunge
Virgin Money's plans for a stock market listing have been revived less than a month after they were put on hold due to turbulent conditions.
The Newcastle-based lender hopes that its shares will be trading on the London Stock Exchange before the end of this month. The company is selling about a quarter of itself in a move expected to value it at nearly £2 billion.
As well as more stable market conditions, Virgin has been boosted by new standards on financial health set by the Bank of England on Friday.
Virgin said it was operating above the recommended requirements of the Bank's proposed l everage ratio, which defines how much capital banks hold as a proportion of their loans.
The lender employs more than 2,500 staff, with 1,700 based in Gosforth, Newcastle, and 200 in Norwich. It is owned by Sir Richard Branson's Virgin Group, Wall Street billionaire Wilbur Ross and an Abu Dhabi investment fund.
Virgin, which provides mortgages, savings and credit cards to 2.8 million, bought former failed lender Northern Rock from the Government for an initial £820 million.
The flotation will result in another £50 million being returned to the taxpayer, taking the total paid to the Treasury to £1.02 billion. Each employee will be also be awarded £1,000 worth of shares on flotation.
Chief executive Jayne-Anne Gadhia said: " Access to the public capital markets has been a long-term strategic objective for Virgin Money and we are now ready to take this important step forward for our business."
Virgin intends to use the £150 million it plans to raise on boosting its share of the UK mortgage lending market to over 3%, as well as lifting its credit card lending from £1 billion to £3 billion by 2018.
Last month, Virgin said the shares sale would happen ''as soon as constructive market conditions allow'' after a collapse in confidence caused the FTSE 100 Index to slump by more than 9% from early September.