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UPDATE 1-Australia's Slater and Gordon sets recapitalisation deal; MD steps down
June 29, 2017 / 5:10 AM / 5 months ago

UPDATE 1-Australia's Slater and Gordon sets recapitalisation deal; MD steps down

* Secured lenders group gets 95 pct of company’s equity

* Andrew Grech will step down as group managing director (Adds details about deal, context)

June 29 (Reuters) - Australian law firm Slater and Gordon Ltd said on Thursday it has struck a recapitalisation deal with a majority of its secured lenders that gives them almost full ownership of the company.

Under the deal, the lenders, led by Anchorage Capital, who own more than three-fourths of the beleaguered company’s secured debt, will get 95 percent of the company’s equity, the company said in a statement.

Some of the existing secured debt will be amended and restated into a debt facility of A$30 million ($22.98 million) with a three-year term, it said.

As part of the restructuring, Andrew Grech will step down from his position as group managing director, effective immediately.

Additionally, all current directors will resign in due course with new directors appointed by the new lending group, the company said.

The recapitalisation deal is subject to approval by shareholders and lenders and is expected to be completed in Oct. 2017, it said.

Shares of the company were down 3.3 percent on Thursday afternoon after falling as much as 5.4 percent earlier in the day to touch a seven-week low.

Slater and Gordon’s market value has plunged to about A$30 million currently, from about A$2.76 billion in April 2015 following its ill-fated acquisition of the professional services division of British technology and outsourcing company Quindell.

It has been facing a number of lawsuits over its financial statements in recent years. ($1 = 1.3057 Australian dollars) (Reporting By Shashwat Pradhan in Bengaluru; Editing by Himani Sarkar and Muralikumar Anantharaman)

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