Northern Rock's shareholders voted to re-elect the board but curtailed some of its powers Tuesday, sending the bank's shares tumbling.
Two thirds of shareholders voted to prevent the bank’s ability to issue new shares over 5 million pounds ($9.9 million) without approval, which was enough to carry the motion.
Northern Rock's board almost had its asset-selling rights stripped too, as a majority of shareholders voted for the hedge funds proposals. However, they did not reach the 75 percent threshold set for the motion to be passed, leaving control of assets in the hands of the board.
Sanderson said he is "still reasonably confident" that a private-sector solution can be found for the battered mortgage lender, while speaking at the extraordinary general meeting in Newcastle.
All rescue options for the bank will rely on government funding for the next 2-3 years, Sanderson added.
Strategy Due Next Month
Earlier Sanderson said a "substantial amount of work" was needed to achieve a private sale, as he promised to deliver a reviewed strategy for the bank by mid-February.
The stock remained over 15 percent lower after details of the vote emerged.
The board of Northern Rock had warned against restricting its powers in what it said was "a time when prompt, decisive action may be required to deliver an optimum solution for shareholders and other stakeholders (including creditors)."