Listed Australian firm Slater and Gordon this week told investors it has secured extra funding to keep the business going.
The firm told the Australian stock exchange that it has completed an agreement with its new senior lenders to provide up to $40m (£22.7m) of working capital.
The announcement said the three-year loan will ‘provide the company with working capital headroom as it continues to execute its plan to restore its financial performance’.
The company advises that discussions continue regarding the recapitalisation of the business, but the latest funding will be seen as a sign of further commitment from investors.
In March, the company confirmed to shareholders that 94% of its debt had been sold to ‘secondary debt buyers’, which intended to implement a solvent restructure.
The business has bank debts of A$738m (£458m). Original lenders including National Australia Bank, Westpac, RBS and Barclays are reported to have sold off their debt to distressed debt buyers for as little as 22 cents in the dollar.
‘The company and new senior lenders believe a restructure by a debt-for-equity lender scheme of arrangement is in the best interests of all stakeholders,’ Slater and Gordon said at the time.
‘The company is continuing its confidential discussions with the new senior lenders regarding the restructure and anticipates that a further update will be provided in the coming weeks.’
Despite the positive outlook of this week’s announcement, it did little to raise the spirits of investors. The share price increased by 46% to 13 cents in March, but has since returned to nine cents a share and the value has barely changed this week.