By Mark Kleinman, City Editor
Sir Richard Branson's banking arm is to revive plans to list on the stock market just days after receiving a boost from new Bank of England rules dictating the amount of capital that lenders must hold to protect them against losses.
Sky News can exclusively reveal that Virgin Money is poised to set out later this week a refreshed timetable for its flotation, which banking sources say is expected to value it at roughly £1.5bn, and result in its shares trading publicly before Christmas.
An announcement from the company, the main sponsor of the London Marathon, could be made as early as Tuesday.
The decision to resuscitate the initial public offering (IPO) comes days after Sir Richard's ambition of launching the world's first passenger space travel operation suffered a major setback following a fatal crash involving his prototype Virgin Galactic spacecraft.
Insiders said that while a final decision had not yet been made, the recovery in bank share prices since last Friday's leverage ratio announcement by the Prudential Regulation Authority (PRA) meant that Virgin Money was likely to revive its IPO much sooner than expected.
Virgin Money announced its intention to float on 2 October, targeting £150m from the sale of new shares in the company.
On 17 October, with stock markets hit by volatility caused by concerns about the Ebola virus, the threat of deflation and broader concerns about global economic growth, the company issued a further statement saying:
"Virgin Money continues to progress its plan for an initial public offering, mindful of market conditions. It now expects admission to occur later than October 2014 and as soon as constructive market conditions allow."
That market volatility prompted a number of other companies, including Aldermore, another fast-growing UK bank, to shelve its flotation indefinitely.
However, the stabilisation of equity markets since then, and last week's PRA announcement that the leverage ratio would be set lower than investors had expected, has encouraged Virgin Money to mount another attempt at listing.
Mark Carney, the Governor of the Bank of England, was praised by bank investors for adopting a pragmatic approach to the new rules, which will come into effect during the next few years.
In a statement responding to the PRA announcement, Jayne-Anne Gadhia, Virgin Money's chief executive, said: "One of Virgin Money's core strengths is our robust capital position and high-asset quality.
"As such we welcome the new leverage ratio framework announced today by the Financial Policy Committee, and are pleased to note that we operate in excess of the recommended requirements."
Ms Gadhia said Virgin Money had performed strongly during the third quarter, winning a 4.5% share of new mortgage applications.
"Looking to the future, we have a powerful brand, a strong balance sheet, a strong core business franchise and considerable opportunities to continue to extend our product range," she said.
Virgin Group and WL Ross, a US-based investment vehicle, collectively own just over 90% of Virgin Money.
The UK bank listing is not the only Virgin-backed company progressing its plans to go public this week despite the Galactic crash in the Mojave desert, which early reports have attributed to pilot error.
Virgin America, the US domestic airline partly owned by the British billionaire, published a listing prospectus on Monday which cited "adverse publicity in relation to the Virgin brand name" among its risk factors.
Bank of America Merrill Lynch, Barclays, Citi, Goldman Sachs and Keeffe Bruyette & Woods are working on the Virgin Money flotation.
A Virgin Money spokesman declined to comment.
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