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Thu 10 Jan 2008 01:16 PM

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GCC funds invited to bail out Northern Rock

Stricken British mortgage lender looks to oil-rich States to bankroll rescue plans.

Sovereign wealth funds of oil-rich Middle Eastern governments have been given the green light to finance any rescue bid for stricken building society Northern Rock.

The mortgage lender, based in Northern England, is being propped up by the British Government as a bail out strategy or outright sale is sought.

Goldman Sachs has been hired by the UK Treasury to help find a private sector solution for Northern Rock. Any objections to Middle East oil money being used to save the bank have now been removed, according to UK newspaper reports.

Current bidders, including Richard Branson's Virgin Money and investment vehicle Olivant, are struggling to raise the necessary funding for an acquisition due to the subprime lending crisis.

Virgin Money and now Goldman Sachs are both rumoured to have spoken to representatives of the Abu Dhabi Investment Authority and the Qatar Investment Authority with a view to securing backing for a rescue bid.

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