An investment group led by veteran troubleshooter Luqman Arnold made a long-awaited rescue proposal for Northern Rock today, as another suitor, US buyout firm JC Flowers, pulled out of the bidding.
Britain's government, which has sanctioned £25 billion (€34 billion) of Bank of England loans for Northern Rock since it became the country's biggest casualty of the global credit crunch in September, has picked a group led by Richard Branson's Virgin Group as its preferred bidder for the bank.
But it has said it is open to talks with other parties and Arnold said he was optimistic his proposal better meets the needs of government, shareholders and other stakeholders.
"The government has indicated its complete openness to any proposals that address the issues and the needs ... (we) can repay the loan while treating shareholders very well," he said.
"Our proposal is simpler, smoother and quicker," he added, saying it was based on stabilising the bank, bringing in new management and then developing the company as "a strong, independent brand" - keeping the Northern Rock name.
Olivant, the group headed by Arnold, the former boss of British bank Abbey, said its proposal would enable Northern Rock quickly to repay between £10 billion and £15 billion of Bank of England (BoE) loans. It aimed to repay the BoE loans in full by the end of 2009.
The Virgin group has said it would immediately repay £11 billion of the BoE loans.
"There's a pretty finite amount that can be raised in today's market for this company with its assets, and the range right now is £10-£15 billion," Mr Arnold said.