Stock market turbulence has forced Virgin Money, the high street bank part-owned by Sir Richard Branson, to delay its plans for a flotation that could have valued the business at up to £2bn.
The flotation, which was expected this month and would have led to £50m being paid to taxpayers and a multimillion-pound share award for its chief executive, Jayne-Anne Gadhia, has been put on hold until “market conditions allow”.
The move comes as the stock market has been knocked by concerns about global economic growth and the potential threat of Ebola, leading the specialist lender Aldermore to abandon its plans for a listing. The FTSE 100 index of leading shares has lost 300 points since Virgin announced its intention to float at the start of this month.
Virgin Money insisted it still intended to conduct its share sale in the future. It has 75 branches as a result of buying the “good” part of the split Northern Rock in 2011 for £747m, and the flotation would require another payment to the government and 2,800 employees who were in line for a free share handout of £1,000 each.
The bank did not issue a fresh timetable for its flotation, other than to say it would be later than October 2014. Gadhia said: “Virgin Money continues to perform strongly and we remain focused on delivering a successful initial public offering as soon as market conditions allow.”
