Yes, we are teasing a touch, but the deal as explained by the Australian gives us the impression that anybody who jumped in the water a few years ago with Slater and Gordon a few years back didn’t realize how many sharks they’d be swimming with..
Here’s what the Australian say by way of introduction– more at the link
Stricken law firm Slater & Gordon will be effectively owned by a consortium of hedge funds led by Anchorage Capital Partners in a debt-for-equity deal that wipes out the holdings of existing shareholders.
Anchorage and a clutch of other hedge funds have swapped debt they snapped up at a steep discount to its $750 million face value for 95 per cent of Slater & Gordon’s equity.
Under the proposal, first floated in June and signed off by Slater & Gordon’s board on Thursday night, existing shareholders will hold the remaining 5 per cent of the company. Shareholders will need to approve the deal at an investor meeting in November.
The move came as Slater & Gordon posted a loss of $546.8 million for the past financial year, coming on the back of the previous years impairment-heavy loss of $1.01bn.
The latest result was hit by $361 million worth of write downs, mostly linked to taking a knife to goodwill on the UK business during the first half. Revenue across the business slumped 30 per cent to $653 million.
The hedge funds will increase Slater & Gordon’s existing $40m debt facility to $90m. As part of the plan Slater & Gordon will spin off its troubled UK business, from the profitable Australian operations. The hedge funds will own the UK business under a separate holding.
Slater & Gordon chairman John Skippen said the recapitalisation plan was the best opportunity to secure the future of the firm and its clients and employees.
