I was inspired to undertake this module having read Richard Branson’s autobiography “Losing my Virginity” whilst inter-railing around Europe this summer. My degree – Natural Sciences – has provided little fundamental knowledge about business, so I was surprised by how gripped I was by the end of his story. I am looking to work in the technology sector, so taking my first business module is a critical step towards improving my employability prospects.
Businesses will often transition between the private and public sectors for varying reasons, but often to gain public funding. The Virgin Group ltd is a holding company, of which a few of their subsidiaries have changed between sectors to benefit. During the 2008 financial crisis Northern Rock plc was nationalised, and virgin money started the bid for their acquisition with the “good bank” part of Northern Rock plc (Michie & Llewellyn, 2010). In 2011 Virgin Money agreed to buy Northern Rock from the national Treasury with the aim to help UK’s banking sector:
Virgin Money and Northern Rock combined to form Virgin Money plc, and they floated their stocks on the the London Stock Exchange (LSE) with its IPO of 283p on 17th November 2014 (BBC, 2014), and joined the FTSE 250 in 2015: LSE: VM. This transition from private to public raised around £150m, and allowed virgin to finally pay back the £50m they owed the Treasury for buying Northern Rock. The National Audit Office analysed this sale, and stated that: “although the sale to Virgin Money generated a loss for the taxpayer, it was the best available option to minimise future losses” (Morse 2012). Additionally, Virgin reported “127 per cent increase in underlying profit for 2014 which ended the year at £121.2 million” (Gadhia, 2014) showing that this change also positively affected Virgin Money.