Decision follows a string of disappointing financial results
Aussie-listed Slater and Gordon (S&G) has confirmed it will break off its UK operations and hand control over to the firm’s senior lenders.
In an announcement to the Australian Stock Exchange (ASE) today, personal injury solicitors S&G revealed that as part of a recapitalisation deal with its creditors, all UK operations will be placed in a separate holding company called UK HoldCo. The new business will be UK-based and wholly owned by the personal injury giant’s lenders.
S&G’s statement to the ASE said:
The company believes the separation of the UK operations provides the best option to enable both the Australian and UK operations to succeed in their own right and will enable the company to focus its management’s time and resources on the Australian business.
According to reports, S&G’s senior lenders have now agreed to provide an additional AU$50m (£30.7m) in funding, as part of today’s deal. Legal Cheek understands that the firm’s current shareholders will now cease to have any interest in the UK arm.
S&G — the first law firm to float on the ASE when it did so in 2007 — entered the UK legal market in 2012 with the £53.8m takeover of Russell Jones & Walker. Keen to strengthen its UK platform, it made a number of subsequent acquisitions including the professional services arm of Quindell for £637m in 2015.
However disappointing financials have blighted the Melbourne-headquartered outfit, which is known in the UK for its TV adverts. Citing among other things UK underperformance, S&G recorded losses in excess of AU$1bn in 2015/16 (then £580m) and AU$546.8m in 2016/17 (then £335m). In an attempt to stem its losses, S&G reduced its UK headcount by 20% and closed 18 of its 48 offices.
The latest figures available (June 2017) show that gross debt currently sits at AU$780.9m (£478m).
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