Rock agrees to emergency meeting
The meeting will be the first high-profile occasion for shareholders to grill management after the bank ran into trouble in September.
Two of the bank's major shareholders are calling for restrictions on the bank's ability to sell the company's assets or issue new shares.
Problems in financial markets saw a run on the bank earlier this year.
The bank has also come under fire on Friday after it emerged that it wrongly told borrowers that mortgage payments were overdue.
Rescue
I believe that these resolutions are unnecessary and potentially damaging
Bryan Sanderson, Northern Rock chairman
Hedge funds RAB Capital and SRM Global requested the extraordinary meeting, but Northern Rock said their proposed resolution would hinder a rescue of the beleaguered bank.
The two funds have a combined stake of over 16% in the bank.
They have requested that shareholders should have the power to block any moves to sell more than 5% of Northern Rock's assets, issue large chunks of new shares, or buy any assets.
Bryan Sanderson, the bank's chairman, urged shareholders to vote against the restrictions.
"I believe that these resolutions are unnecessary and, in view of the difficult and challenging circumstances currently affecting the company, potentially damaging."
Northern Rock has borrowed at least £25bn in emergency funding from the Bank of England.
A consortium led by Virgin Group and a rival investment group called Olivant are in talks with Northern Rock's advisers and the UK Treasury.
Some politicians and analysts believe nationalisation of the bank or some form of public administration could be the best option.
Mortgage mix-up
Northern Rock has come in for criticism from mortgage holders after those who pay their loan installments by standing order were asked to make their monthly payment as soon as possible.
To avoid possible postal delays, the bank said it sent the letter to all customers, including those whose payments are not yet due.
Borrower Mark Bond was asked to make an immediate payment on his debit card even though his mortgage payment is not due until later in the month.
"At first I thought it was just one more branch of their incompetence," he said.
"I can imagine some people will be panicked into paying on their debit card, then the standing order will go through and they will have paid twice.
"It's a cash-flow game and I don't think it's appropriate," he added.
Northern Rock has apologised for any confusion the mailing has caused, and denied there was any intention to encourage customers to pay more than the normal amount.
The bank's public relations manager Jemma Rundle said the letter sent out clearly states that it should be ignored if a recent payment has been made or an arrangement is in place.
However, she admitted that this month the bank had sent the letter to all its standing order customers, including a sizeable number whose payments have not yet fallen due, and who were not therefore late.
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Ok, nevermind emergency meeting, the fact that the Crock is asking customers to make their normal morgage payments ASAP rather than at previously agreed time means that despite tens of billions of cash from BoE they are desperate for money. That's a very bad sign IMO, it sure means that whatever they earn from morgages they sold does not cover their costs.
The meeting will be the first high-profile occasion for shareholders to grill management after the bank ran into trouble in September.
Two of the bank's major shareholders are calling for restrictions on the bank's ability to sell the company's assets or issue new shares.
Problems in financial markets saw a run on the bank earlier this year.
The bank has also come under fire on Friday after it emerged that it wrongly told borrowers that mortgage payments were overdue.
Rescue
I believe that these resolutions are unnecessary and potentially damaging
Bryan Sanderson, Northern Rock chairman
Hedge funds RAB Capital and SRM Global requested the extraordinary meeting, but Northern Rock said their proposed resolution would hinder a rescue of the beleaguered bank.
The two funds have a combined stake of over 16% in the bank.
They have requested that shareholders should have the power to block any moves to sell more than 5% of Northern Rock's assets, issue large chunks of new shares, or buy any assets.
Bryan Sanderson, the bank's chairman, urged shareholders to vote against the restrictions.
"I believe that these resolutions are unnecessary and, in view of the difficult and challenging circumstances currently affecting the company, potentially damaging."
Northern Rock has borrowed at least £25bn in emergency funding from the Bank of England.
A consortium led by Virgin Group and a rival investment group called Olivant are in talks with Northern Rock's advisers and the UK Treasury.
Some politicians and analysts believe nationalisation of the bank or some form of public administration could be the best option.
Mortgage mix-up
Northern Rock has come in for criticism from mortgage holders after those who pay their loan installments by standing order were asked to make their monthly payment as soon as possible.
To avoid possible postal delays, the bank said it sent the letter to all customers, including those whose payments are not yet due.
Borrower Mark Bond was asked to make an immediate payment on his debit card even though his mortgage payment is not due until later in the month.
"At first I thought it was just one more branch of their incompetence," he said.
"I can imagine some people will be panicked into paying on their debit card, then the standing order will go through and they will have paid twice.
"It's a cash-flow game and I don't think it's appropriate," he added.
Northern Rock has apologised for any confusion the mailing has caused, and denied there was any intention to encourage customers to pay more than the normal amount.
The bank's public relations manager Jemma Rundle said the letter sent out clearly states that it should be ignored if a recent payment has been made or an arrangement is in place.
However, she admitted that this month the bank had sent the letter to all its standing order customers, including a sizeable number whose payments have not yet fallen due, and who were not therefore late.
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Ok, nevermind emergency meeting, the fact that the Crock is asking customers to make their normal morgage payments ASAP rather than at previously agreed time means that despite tens of billions of cash from BoE they are desperate for money. That's a very bad sign IMO, it sure means that whatever they earn from morgages they sold does not cover their costs.
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