UK - Shareholders in Northern Rock have failed to pass resolutions that would have required the Board to receive further shareholder approval before selling assets worth more than 5% of the company.
The Extraordinary General Meeting was called by the bank's two largest shareholders - hedge fund companies SRM Global Master Fund and RAB Capital - in an attempt to stop the bank being sold to potential bidders at what they believe is less than fair value.
Resolutions proposed by the firms would require further shareholder approval before the directors could issue new shares in the company above certain thresholds; sell assets of more than 5% of the total value of all the group's assets within 12 months, buy assets worth more than 20%; or authorise other members of the group to dispose or transfer shares.
Results of the EGM revealed the only resolution which was passed was to limit the issue of new shares above certain thresholds, while the remaining three proposals were defeated as they required a 75% majority and instead the results ranged between 65-66%.
Bryan Sanderson, chairman of Northern Rock said: "Whilst we are pleased that all but one of the resolutions proposed by SRM and RAB Capital were not carried, we recognise that a material number of shareholders did vote in favour of these resolutions. Shareholders should be assured that the Board of the company will continue to work towards securing the best possible outcome for shareholders and other stakeholders in the company."
The firm, which is estimated to have a pension deficit of around £100m, said its strategic review into finding a solution to "current difficulties" is expected to be completed by February 2008.
The EGM was called in part by shareholders because there are still serious concerns about the financial future of the company, following the credit crunch crisis and its impact on the firm's financial status. The Northern Rock crisis has a significant impact on the funding of other pension funds across Europe after its share price fell in September and October over worries the company could collapse.
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