New Star Asset Management under serious pressure
The shares of the new Star asset management were today suspended on the stock exchange at the company's request as talks with bankers regarding their refinancing continue. Initially the company had requested a suspension of trading when they fell to 14p but this was refused and only agreed when the shares fell below 6p. This is a serious drop from the five pound level seen just 18 months ago and there is some confusion as to the immediate future of the group.
The company is said to owe around £230 million to its bankers and is currently in negotiations to arrange new facilities to see the group through the short term and into the medium and longer term. The signs that all was not well appeared a few weeks ago when the group was forced to arrange further finance and only last week the company suspended its flagship property fund.
There is some confusion and debate as to whether the banks will be able to organise alternative funding although it is known that a number of competitors are monitoring the situation carefully and would be interested in taking on the £14 billion of investment funds under management.
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