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Virgin to Ask N.Rock's Small Investors for $1,600

Diehard retail investors in Northern Rock would be asked to invest about 770 pounds ($1,600) in the company if a proposed Richard Branson-led rescue of the stricken mortgage bank proceeds.

The Virgin consortium's proposals include a rights issue to raise 650 million pounds ($1.35 billion) at 25 pence per share, equivalent to asking Northern Rock's original shareholders to buy about 3,080 new shares, according to Reuters calculations on Tuesday.

When the mutually-owned Northern Rock Building Society listed in London in October 1997 it handed 500 shares apiece free to each of 885,764 qualifying investors and borrowers, according to its Web site.

Some people qualified on both counts, got 1,000 shares and were doubly happy when Northern Rock shares closed at 463 pence on their first day of trading -- October 1 1997.

The Virgin consortium's proposed rights issue would result in 2.6 billion new shares being issued, just under 6.2 new shares for every existing Northern Rock share, or about 3,080 shares if such investors still own the 500 shares given in 1997.

Northern Rock would not say how many "small investors" it has, but the figure is widely believed to be well over 100,000.