Slater & Gordon lenders take a haircut
The main lenders to embattled law firm Slater & Gordon have sold 94% of their loans at a significant loss to a consortium of distressed debt investors.
Westpac, National Australia Bank, Royal Bank of Scotland and Barclays banks have accepted losses of 70% to 80% on their loans, according to the Financial Times.
S&G and the new senior lenders said a planned debt-for-equity scheme of arrangement would be in the best interests of stakeholders.
The arrangements confirm that shareholders in S&G will bear the brunt of a restructuring.
S&G said its lenders intended to “implement a solvent restructure of the company and… to reset its debt structure to ensure the company has a sustainable level of debt and a stable platform for its future operations both in Australia and the UK”.
Last month, the Australian law firm posted a £263m loss and said that bad publicity is continuing to hamper the turnaround of the business.
The reported a A$425.1m (£263m) net loss for the six months to the end of December, from a loss of A$958.3m (£593m) in the same period last year.
The group’s results were affected by a A$350.3m (£217m) impairment charge relating to its 2015 acquisition of the professional services arm of UK-based Quindell, which has since been renamed Watchstone Group.
Slater & Gordon’s share price has collapsed over the last year, following its disastrous £673m acquisition of Quindell in the UK.
The firm employs more than 3,500 people across offices in the UK, including Manchester, Liverpool, Preston, and Chester.