Dubai International Capital said yesterday that it could take as long as six months to conclude a rescue of Northern Rock and signalled it was possible that no deal would materialise for the stricken British mortgage bank.

DIC, the private equity group owned by the ruler of Dubai, is working as part of a consortium with Sir Richard Branson’s Virgin Group on a potential bid for the Rock, which was brought to it knees by this summer’s credit crunch.

Sameer al-Ansari, DIC’s executive chairman, told The Times: “There’s a tremendous amount of work to be done. It will take at least another quarter, or three to six months.”

The news casts doubt on the validity of the Virgin approach, as the Bank of England has said that it will bankroll the Newcastle bank only until February 2008.

Background

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• BP offers Abu Dhabi green solution

• Och-Ziff seeking cash on eastern horizon

Dubai starts to get message

Claims that such companies as DIC are not state funds but private investment vehicles for the ruler will not wash

Background

• Dubai fund snaps up $1.25bn Och-Ziff stake

• Baugur teams with Dubai retailer for Saks bid

• Arcapita sells water company

• Bahrain banks focus on going by the book

• Forte trains sights on Gulf expansion

Emirates get Western bugbear

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• BP offers Abu Dhabi green solution to chronic gas shortages

• Middle East can leave oily old cycle in the past

• Towers reach for the sky on a daily basis as Dubai booms

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DIC said that the consortium was still deep in the due diligence process. It added that the emirate could provide equity as well as debt, provided the returns met their expectations.

DIC said that it planned to launch a private equity fund in an attempt to open up to international investors. Mr al-Ansari said that DIC would begin fundraising next year with plans to have assets under management of $25 billion within two years.

Blackstone confirmed yesterday that it had been brought in as a third adviser to Northern Rock.

Representatives from the Bank of England, the FSA, the Treasury and Britain’s banks will meet at the British Bankers’ Association’s headquarters today to discuss the credit crunch.

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