The board of beleaguered Northern Rock will attempt to fight off demands from shareholders for a greater say in the firm’s future at an extraordinary meeting this week amid speculation the bank could be renationalised within days.
It comes as Tory leader David Cameron said nationalising the bank as opposed to a private sector sale would be “complete humiliation and failure” on the part of ministers.
It follows the disclosure yesterday that a top City troubleshooter had been recruited by the Treasury to head the bank in the event of it becoming nationalised.
The appointment of Ron Sandler, a former chief executive at Lloyd’s of London, suggested that contingency plans should a private sector buyer not be found, were well advanced.
Some analysts are now predicting that an announcement by Chancellor Alistair Darling could be made within days, perhaps even ahead of tomorrow’s shareholders’ meeting.
Thousands of investors are expected to flock to Newcastle’s Metro Radio Arena tomorrow to vote on proposals which Northern Rock’s chairman Bryan Sanderson has described as “potentially damaging”.
Hedge funds SRM Global and RAB Capital, which together own around 18% of the lender, want to limit the board’s ability to sell off assets and issue new shares without their approval.
The duo say they are looking to protect shareholders’ rights, although the board – which is urging investors to vote against – have said the measures could tie their hands over engineering a rescue of the stricken bank.
Mr Sandler’s recruitment by the Treasury provoked speculation over the weekend that a nationalisation of Northern Rock could be just days away.