Slater and Gordon is about to get new owners after the banks offloaded $680 million in loans

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Slater and Gordon is about to have new owners.

Most of the debt of troubled law firm has been sold off at a substantial discount, as high as 80%, and is set to be swapped for equity.

The company says it’s been notified that 94% of its debt has traded from its original syndicate lenders, including Westpac and the NAB, to secondary debt buyers.

A short time ago, Slater and Gordon shares were up by more than half to $0.14.

In 2015 the shares hit a high of $8.07, valuing the company at $2.8 billion, but have been on steep slide because of its underperforming UK business and the British government plans to limit compensation for road accidents.

The company had net debt of $680.4 million in June last year. The company’s market capitalisation today is about $50 million.

“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,” the company said in a statement to the ASX today.

Slater and Gordon says the new senior lenders fully intend to reset the company to ensure it has a sustainable level of debt and a stable platform for its future operations both in Australia and the UK.

The new holders of the company’s debt have not yet been named.

However, the Australian Financial Review reports New York based hedge fund Anchorage is understood now be the largest owner of the personal injury firm’s debt.

In August last year, the world’s first stock exchange-listed law firm posted a widely expected annual loss of $1.017 billion.

The result included a $879.5 million non-cash impairment against the value of goodwill after its UK business earnings.

And last month the law firm reported a $425.09 million loss for the six months to December. The result included a $350.3 million impairment charge against the value of its UK business.

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