Australian-listed law firm Slater and Gordon has sold off 94% of its loans to a consortium of investors to restructure the business.
The banks backing the firm have reportedly accepted heavy losses of up to 80% on their loans to the firm. Shares in the firm traded as low as 13 Australian cents.
Slater and Gordon said its new lenders ‘fully intend to implement a solvent restructure of the company…to ensure that the company has a sustainable level of debt and a stable platform for its future operations both in Australia and the UK’.
The firm said it was planning a debt for equity scheme to revive the business.
Slater and Gordon’s Australian and UK operations have had a difficult run since the firm’s takeover of UK insurance claims provider Quindell for £673m in 2015, which has since been rebranded as Watchstone Group.
The firm has come under increased scrutiny after its banks last year ordered an investigative review of its books, while in 2015 the UK’s Serious Fraud Office opened an investigation into Quindell’s ‘business and accounting practices’.
Earlier this year, the firm posted an A$425.1 (£262.6m) net loss for the second half of 2016. UK fee income declined 35% in the last six months of the year, while the firm was forced to restructure its UK operations.
In the UK, the personal injury firm launched a plan to reduce headcount by 16% and set a target of cutting down its operating sites from 47 to 32 ‘with further locations scheduled to be re-organised or closed in the remainder of 2017’.