Firm raises €21.6bn to rescue Northern Rock

A private equity firm has raised £15bn (€21.6bn) for a potential rescue of crisis-hit mortgage lender Northern Rock, it was reported today.

Chris Flowers, head of New York-based private equity firm JC Flowers, has gained the funding commitments from banks including JP Morgan, Credit Suisse and Wachovia, the Daily Telegraph said.

Northern Rock’s stock market value has tumbled to £571m (€822m) since it was forced to seek emergency funding from the Bank of England.

But Mr Flowers’ commitments would cover the estimated £8bn (€11.5bn) in loans which the Newcastle-based group has since borrowed from the Bank’s emergency facility.

The private equity chief, who specialises in distressed takeovers of financial firms, is said to be keen to keep the Newcastle-based lender intact, unlike Cerberus, a rival private equity firm also rumoured to be interested in the business.