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New Star Asset Management on verge of rescue deal

John Duffield appears to be on the verge of announcing a rescue package for his New Star Asset Management group which will see the shares delisted from the stock exchange and deem the ordinary shares effectively worthless. In exchange for writing off much of the £240 million debt burden currently carried by the business, the likes of HBOS, Lloyds TSB, Royal Bank of Scotland, HSBC and National Australia Bank have agreed to take control of the business via convertible preference shares and delist it from the stock market.

This marks a major loss for John Duffield who had a substantial investment in the business but does allow the company to operate into the future with the fund manager's stock pickers set to be rewarded with multi-million pound golden handcuff deals. This is unlikely to go down well with ordinary shareholders who will effectively see their investments disappear overnight but as John Duffield suggested, the banks are now in control and there is no real alternative on the horizon.

However, those who are looking to write off John Duffield would do well to think again as this is a man who has taken on and beaten the city on a number of occasions and does not know the word failure. A multimillionaire in his own right he does not need the stress of running a business but apparently this is what makes him tick.

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