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Ex-Tory donor’s bank Oaknorth in talks to buy stricken Silicon Valley Bank UK | Business News


A corporate lending firm founded by a prominent former Conservative donor is in talks to buy the operations of Silicon Valley Bank in the UK, the US lender has collapsed. poured in last week.

Sky News can exclusively reveal that Oaknorth Bank, valued at nearly $3 billion in a funding round in 2021, is in detailed negotiations with banking and government regulators about its acquisition offer. Silicon Valley Bank UK.

City sources say the formal proposal will be subject to due diligence, potentially lasting several days, but Oaknorth hopes to receive regulatory approval of its proposal soon. especially on Sunday night.

A banker says that Oaknorth Bank is vying for rival interest from the Bank of London – revealed by Sky News on Saturday – and ADQ, an Abu Dhabi state-owned investment vehicle contradiction.

Oaknorth’s interest is reportedly likely to get support from regulators, building on its eight-year track record since it was launched by co-founders Rishi Khosla and Joel Perlman.

Mr Khosla has donated hundreds of thousands of pounds to the Conservative Party and in 2020 hired Lord Hammond, the former prime minister, as an adviser.

Oaknorth is a British ‘neobank’ – or digital lender – that describes itself as a key contributor to the UK’s technology and innovation ecosystem by using data and analytics to provides banking services to small and medium enterprises.

More about Silicon Valley Bank

It has a loan book of £4.7 billion and has lent more than £10 billion during its existence.

An insider said they are currently working to find a solution to support customers of SVB UK and the broader tech sector, which has been shaken by the bank’s collapse.

Oaknorth declined to comment.

The Bank of London’s interest in SVB UK is also said to be at the details stage, with the government and regulators racing to find a solution to the crisis before the market opens. door on Monday morning.

Formal proposals from the Bank of London to acquire SVB UK have now been submitted to the Treasury, the Bank of England and the lending board, chaired by Darren Pope, former chief executive of Virgin Money. president.

ADQ’s concerns are also said to be serious, while the UK’s major high street lenders have also been encouraged to explore offers for SVB despite skepticism that they will do so. So.

Rothschild, the investment bank, was asked by SVB UK to process the process quickly with permission from the Bank of England.

The Treasury said in a statement on Sunday that the government was working on funding solutions to help hundreds of SVB UK customers meet cash flow obligations.

“The UK has a world-leading technology sector, with a dynamic startup and scaling ecosystem,” it said.

“The government recognizes that, given the importance of Silicon Valley Bank to its customers, its failure could have a significant impact on the liquidity of the technology ecosystem.

“The Government is making this a high priority, with discussions between the Governor of the Bank of England, the Prime Minister and the Prime Minister taking place over the weekend.

“The Government is working to find a solution to avoid or minimize damage to some of our most promising companies in the UK and we will have immediate plans in place to ensure operational needs are met.” The short-term dynamics and cash flows of UK Silicon Valley Bank’s clients can be met.”

The collapse of SVB’s US-listed parent company, which is already controlled by the government, was one of the biggest global bank failures since the 2008 financial crisis.

UK depositors will receive up to £85,000 as part of a resolution by the UK branch of SVB, raising concerns about the fate of significant funding in the startup community.

“We are working at a rapid pace to find a solution, we will soon have plans in place to ensure everyone can meet their cash flow requirements, pay their employees, ” Jeremy Hunt, the prime minister, told Sophy Ridge on Sunday.

“But obviously what we want to do is find a long-term solution that minimizes or even completely avoids the loss of some of our most promising companies.”

On Saturday, dozens of early-stage companies wrote to Mr Hunt to warn of an “existential threat to the UK’s tech sector”.

In a letter seen by Sky News, founders including those from Adzuna, Curve and Thriva called on Mr Hunt to intervene.

“Most banks for the most dynamic and exciting tech businesses have SVBs and have no or limited diversity of where to keep their deposits,” the draft letter said.

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Prime Minister Jeremy Hunt discusses ‘serious risks to tech sector’ after Silicon Valley Bank collapse

“This weekend, much of us as tech founders are running the numbers to see if we’re technically insolvent.

“The impact of this is much bigger than our individual businesses.

“The assessment by the Bank of England that SVB going into administration will have limited impact on the UK economy reveals a dangerous lack of understanding about the sector and its role in the broader economy.” more, both now and in the future.”

The founders have warned Mr Hunt, who will deliver his Budget statement on Wednesday, that the collapse of SVB UK would “paralyze the sector and set the ecosystem back 20 years”.

They wrote: “Many businesses will be involuntarily liquidated overnight.

“Many other businesses, both in the technology sector and in the broader economy – their customers and suppliers – will be negatively impacted when these businesses go bankrupt.”

Interpath Advisory has been lined up to handle the UK insolvency process.

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