Northern Rock Shareholders

L61kvo

In regards to Northern Rock shareholders before the Government bailed them out.

Will the shareholder get any of their money or shares back when the government sells or splits Northern Rock?

I would like to think so afterall I am still paying a Northern Rock Mortagage, so why should one still exist if the other doesn't.

Nigel

Aegis

L61kvo wrote: »

In regards to Northern Rock shareholders before the Government bailed them out.

Will the shareholder get any of their money or shares back when the government sells or splits Northern Rock?

Very unlikely. Your compensation amount is likely to be next to nothing, and you probably won't receive any new shares if the company is re-floated, as the flotation money is likely to be needed to offset the huge amount of money still owed to the government by Northern Rock.

I would like to think so afterall I am still paying a Northern Rock Mortagage, so why should one still exist if the other doesn't.

Why would the existence of a mortgage be linked to the existence of shares? One's an investment that went sour, the other is money you owe. Buying shares in a bank can't be seen as an excuse to write off your debt to them if the shares tank. In that situation you'd have no risk at all, and the taxpayer would end up paying for your mortgage as well as the bank itself...

Ian_W

Hmm, I thought the linking of shares owned to mortgage owed was a bit odd too!

If a company goes bust and you owe them money AFAIK the debt doesn't die. It's owed to the creditors and collected by the Receivers for distribution. In this case NR technically didn't go bust - it was nationalised to protect savers and borrowers - but couldn't have survived without Government intervention.

To-day it still owes the UK Government £10.9 BILLION - story HERE. As the Government doesn't have any money of its own that money is owed to the taxpayer. In my humble opinion it's the taxpayer who should get any money from the sale, not shareholders.