Virgin Cash

Virgin Records. Virgin Airlines. Virgin Mobile. Virgins in Space. Coming soon to a financial institution near you -- Virgin Money.

Not satisfied with his current crop of businesses, Richard Branson is thinking of going into the banking business by purchasing floundering Northern Rock, a British mortgage lender that is on life support courtesy of the Bank of England's emergency funding.

He's not going it alone, but has taken on board a few wise men who know banking and hedge funds and mergers. George Matthewson is acting as Mr. Branson's adviser in this potential deal, and Mr. Matthewson is a household name in banking households. AIG, the insurance company, is represented, along with WL Ross which specializes in distressed debt. If it's one thing that Northern Rock has in abundance, it's distressed debt. It is reported that Mr. Branson would like to include some Middle East oil money in his new venture as well, along with some experienced bankers who would sit on the Board of Directors.

Virgin Money is small beer at the moment, providing some credit card services, but the acquisition of Northern Rock could move the company into the bigger game that is mortgage financing. Given the current debt load of the struggling lender, however, Mr. Branson's group will have to pony up a large pile of cash, possibly in the billion pound range. Northern Rock's stockholders don't expect to get much for their shares, as the lender is too far sunk into debt.

Can it be done? Is the mortgage market not quite so moribund after all? And will Mr. Branson bungee jump from the White Cliffs of Dover to publicize his latest undertaking?