Print   



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

22 January 2009

New Star Asset Management Group PLC ('New Star' or the 'Company') publishes shareholder circular in connection with proposed de-listing from the Official List and the London Stock Exchange

On 3 December 2008, New Star announced that it had reached agreement in principle with its bank syndicate on the terms of a proposed capital restructuring of New Star including a proposal to cancel the admission of its ordinary shares ('Ordinary Shares') to the Official List of the UK Listing Authority ('Official List') and to trading on the London Stock Exchange's market for listed securities (the 'De-listing').

New Star is today posting a circular to its shareholders in connection with the De-Listing (the 'Circular') setting out the background to and reasons for, and seeking shareholders' approval of, the De-listing. Full details of the final terms of the capital restructuring (the 'Restructuring'), which will require separate shareholder approval, will be set out in a subsequent circular to be published by New Star on or shortly after the effective date of the De-listing. However, to assist shareholders to understand the implications of the De-listing in the context of the proposed Restructuring, details of the Restructuring, summarised in the appendix to this announcement, will also be set out in the Circular.

New Star's board of directors (the 'Board') is actively pursuing possible alternatives to the Restructuring with third parties, including an offer for the Company or a sale of the Company's business, but there can be no certainty that any such alternative transaction will be forthcoming, nor whether any such transaction (if forthcoming) would lead to a significant return, if any, to Shareholders or whether any such offer (if made) would be at or above £0.0293 per Ordinary Share (being the closing price of an Ordinary Share on 9 January 2009, the last trading day prior to the Company entering into an offer period). Accordingly, New Star's Board is committed to and continues to pursue the proposed Restructuring.

It is a condition of the implementation of the Restructuring that De-listing has occurred. It is unlikely that the Company would, in any event, meet the qualifications for continued participation on the Official List following completion of the Restructuring. Accordingly, the Board has concluded that the Company should seek to implement the Restructuring as an unlisted company, which means that the Company will not be required to comply with (or incur costs associated with complying with) the requirements of the Listing Rules.

A general meeting of the Company (the 'General Meeting') is to be held at the offices of New Star at 1 Knightsbridge Green, London SW1X 7NE at 12 noon on 10 February 2009 for the purpose of approving the De-listing. New Star's Board considers the Restructuring to be in the best interests of the Company and Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the De-listing at the General Meeting.

New Star's directors have irrevocably agreed to vote in favour of the De-listing at the General Meeting in respect of their own beneficial holdings of, in aggregate, 28,305,499 Ordinary Shares, representing approximately 12.12 per cent. of the votes capable of being cast on the De-listing. In addition the Company has received irrevocable undertakings to vote in favour of the De-listing in respect of, in aggregate, a further 20,418,307 Ordinary Shares, representing approximately 8.74 per cent. of the votes capable of being cast on the De-listing.

Expected timetable of Principal Events

Latest time and date for receipt of Forms of Proxy for the General Meeting	12 noon on 8 February 2009
Date and time of General Meeting	12 noon on 10 February 2009
Last day of dealings in Ordinary Shares	9 March 2009
Ordinary Shares cancelled from admission to the Official List and to trading on the London Stock Exchange's market for listed securities	8 a.m. on 10 March 2009
Posting of circular in relation to the Restructuring	11 March 2009

Notes to the expected timetable of Principal Events:

(1) If any of the above times and/or dates change, the revised times and/or dates will be notified to shareholders by an announcement through the Regulatory Information Service of the London Stock Exchange

(2) All references in this announcement are to London times 

(3) The De-listing referred to in the above timetable following the General Meeting is conditional upon the De-listing being approved by shareholders at the General Meeting

Given the current financial position of the New Star group (the 'Group') and the uncertain nature of financial markets generally, the Board believes that proceeding with the Restructuring is the best means currently available to it by which the Company can address its financial position, thereby giving greater confidence to the Group's clients. If the Restructuring does not proceed for any reason, absent any other appropriate alternative becoming available, the Company will be unable to comply with its obligations to the Group's lending banks (the 'Banks') under its various borrowing facilities, unless varied, and the Company would immediately enter into further discussions with the Banks. There can be no certainty or confidence as to the timing of any outcome of those discussions with the Banks, or that the outcome would be positive, and New Star's directors therefore believe that, in the circumstances where agreement cannot be reached, the Company would be unlikely to be able to continue to trade, although the directors currently expect that the Group's fund management subsidiaries would continue to trade.  

The Circular will be available, once published, on the New Star website, www.newstaram.com.

Copies of the Circular will shortly be available for viewing at the Document Viewing Facility of the Financial Services Authority (25 North Colonnade, London E14 5HS).

Enquiries:

Citigate Dewe Rogerson

Anthony Carlisle (office) 020 7638 9571 (mobile) 07973 611888

Appendix - summary of the proposed Restructuring

On completion of the Restructuring, the Banks have agreed to convert all but £20 million of the amounts owed to them under the Group's principal borrowing facility (whether in respect of principal or interest), the Group's liability under the interest rate hedging arrangement and fees owed to certain of the Banks under a guarantee facility into:

• new Ordinary Shares representing 75 per cent. of the enlarged fully diluted ordinary share capital of the Company following the issue of those Ordinary Shares (excluding, for this purpose, (i) all Ordinary Shares arising from conversion of the Preference Shares and (ii) any B Ordinary Shares (as defined below) issued); and
  
  
• 94 million new convertible cumulative redeemable preferences shares ('Preference Shares').

In addition, it has been agreed that warrants over a new class of B ordinary shares in the capital of the Company ('B Ordinary Shares'), which once issued will represent up to 5 per cent. of the fully diluted ordinary share capital of the Company (including all Ordinary Shares arising from conversion of the Preference Shares) and up to 6 million new Preference Shares should be made available on or following completion of the Restructuring to certain directors and employees within the Group.  

 

The Preference Shares, which after the first six months following issue will carry an accumulating coupon of 10 per cent. per annum above LIBOR, will (to the extent they have not been redeemed earlier) be repayable in cash (both as to principal and interest) on 30 June 2013. The Preference Shares shall have, as a class, an additional right to receive an annual dividend equal to 0.1 per cent. of the Group's audited profit after tax for the year in question (pro rated for periods of less than 12 months). On 30 June 2013 the Company may elect to convert any outstanding Preference Shares into Ordinary Shares representing up to 95 per cent. of the fully diluted Ordinary Shares in issue (excluding the B Ordinary Shares and dependent on the level of redemptions of the Preference Shares at that time). 

ENDMSCFGGZMFMLGLZZ