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15 Jan, 2008

Marcel Le Gouais
Date: 15-Jan-2008

Northern Rock's two largest shareholders have said they are interested in the bank's long-term future, not short-term profit.

Hedge funds RAB Capital and SRM Global, which together own nearly 18% of NR, asked shareholders at the bank's EGM in Newcastle to vote for a resolution giving them more say over the bank's future.
By 2pm this afternoon the board will know if they have to seek shareholder approval if they want to sell assets worth more than 5% of the company's value.

Phillip Richards, chief executive of RAB Capital, told shareholders: "We want any major change in the company's structure to go before shareholders before it is mzde.

"Northern Rock is a company that deserves to survive. It has helped to reduce the cost of buying a house across the whole country by around 50 basis points, because of its competitive pricing and other lenders being forced to follow suit."

He adds: "We are in it for the long term and we believe this resolution is all about empowerment, not taking power from the board. We believe nationalisation would be a slow death.

Jon Wood, chief executive of SRM Global, revealed the two hedge funds had offered financial support to the board through a rights issue.

He adds: "This is a great bank and I'm sad to think people believe we are interested in it short term. We are not playing bluff. The message is that we're here, ready and willing to support a private sector solution."

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