Richard Branson's Virgin Group is leading a consortium that has submitted a rescue plan for British bank Northern Rock, it said today.
The consortium said under its proposal a "substantial cash sum" will be injected . . . for new equity to be issued at a discount to the current share price".
Virgin said Northern Rock would be renamed Virgin Money and would rebuild a deposit base to drive a more sustainable funding structure.
The consortium includes US insurance group AIG, buyout firm WL Ross, investment group Toscafund and Hong Kong-based investment group First Eastern.
It would be advised by George Mathewson, who masterminded a series of major acquisitions while chief executive and chairman of Royal Bank of Scotland, including the takeover of NatWest, Britain's biggest-ever bank deal.
Northern Rock shares jumped as much as 10 per cent after the consortium became the first company to declare an interest in the bank, which has been engulfed in crisis after being offered emergency funding by the Bank of England a month ago.
The shares slipped off their 285 pence peak and by this afternoon were up 3.1 per cent at 266p, valuing the bank at just over £1.1 billion.
Mr Branson, one of the world's highest-profile businessmen and estimated to be Britain's 11th-richest person with a £3.1 billion pound fortune, pushed Virgin into financial services in 1995.
Virgin Money now offers credit cards, insurance, savings and pensions, and also products in Australia and South Africa. But it no longer directly provides mortgages, after selling out of its Virgin One joint venture with Royal Bank of Scotland in 2001.