Slater and Gordon’s move to new ownership is likely to be confirmed before Christmas after shareholders approved restructuring plans today.
Around 70% of shareholders voted in favour of a consolidation that will effectively leave them with a fraction of their present holding. The poll was held at this week’s annual general meeting in Melbourne, Australia.
New equity will be issued to lenders, effectively transferring ownership of the UK business to New York hedge fund Anchorage Capital Group. The date for legally separating the UK and Australian business will follow a court hearing in Australia next week, and bosses expect the transfer to be complete before Christmas.
In a notice sent to staff this morning, seen by the Gazette, the company reports that the new shareholders’ interests are ‘entirely aligned’ with the firm’s, and this change will position the UK business for ‘enduring success’.
In a press statement, UK chief executive Ken Fowlie (pictured) said this is a ‘good day for our business’. He added: ‘We’ve secured the support of shareholders and senior lenders, who believe the company has a bright future – both in the UK and Australia.
’The formal completion of the recapitalisation and separation process will mean the businesses in the UK and Australia will be best placed and more flexible to evolve to meet our respective clients,’ need for world class legal services.
“The legal industry is facing many challenges but also great opportunities. However, we are confident that, with significantly reduced debt and our dedicated colleagues, Slater and Gordon is positioned to thrive in a dynamic market.’
The approval of plans by shareholders, described by one Australian publication as a ‘vote for mercy’, means the UK company’s debts are effectively written off.
Speaking at the AGM, chairman John Skippen said the proposal was the only way to keep the business solvent. He told attendees the outcome was bound to be ‘disappointing’ for shareholders but added that recapitalisation provided the ‘only opportunity to secure the future of the firm and its workforce’.