NEW LENDERS THROW SLATER AND GORDON ITS SECOND CAPITAL LIFELINE
Written on the 8 May 2017 by Business News Australia
LENDERS have thrown Slater and Gordon (ASX: SGH) another lifeline in the form of a new $40 million working capital facility which will operate on a three-year term.
The agreement was executedlate last week to give Slater and Gordon working capital headroom as the troubled firm climbs its way back to square one financially.
This follows Slater and Gordon's market update late last month that it had secured approval for a further $72 million worth of loans from its debt buyers.
As of 17 March, more than 94 per cent of the firm's debt had been traded from its original syndicate of lenders to secondary debt buyers.
In addition, on 31 March the company announced it had executed a share buyback from its legacy employee ownership plan which was introduced in 2007.
It seems Slater and Gordon is continuing to chip away at its enormous debt facility which, only a few weeks ago, was declared to be worth more than the company itself.
Following its ill-informed acquisition of UK firm Quindell in 2015, the company has racked up a total debt in excess of $1 billion and has lost around 98 per cent of its total market cap.
The firm is continuing discussions with its lenders on a long-term recapitalisation structure and assures it will update the market in due course.
Final discussions with the new senior lenders will be successfully concluded in the next few weeks.
Business News Australia
Author: Business News Australia