New Star in talks with banks, suspends shares

British fund manager New Star Asset Management said on Monday it had requested that its shares be suspended pending the outcome of talks with its banks.

"New Star announces that it is in advanced and constructive discussions with its banking syndicate," the group said.

New Star, hit by fund outflows as clients spooked by the deteriorating economy withdraw their cash, announced on Nov. 14 that it had accepted tougher terms on its bank debt following talks with lenders.

Under the new terms, the interest rate on New Star's 236 million pound ($364.1 million) bank debt rose by 1.5 percentage points.

New Star shares closed at 14 pence on Friday, having lost 92 percent of their value since the beginning of the year.