Slater and Gordon has unveiled another loss, this time $546.8 million after more than $1 billion last year, as the first ASX-listed law firm comes under the control of new hedge fund owners.
The company, brought down by an investment in a UK business which went sour, will now be owned by funds led by Anchorage Capital under a recapitalisation deal which turned debt into 95% of Slater and Gordon.
The original shareholders have seen their combined holding shrink to 5% with a value of just $1.35 million, according to the latest share price of $0.078.
Its shares hit a high of $8.07 in 2015, valuing the world’s first stock exchange-listed law firm at $2.8 billion.
But they went on a steep slide because of the company’s underperforming UK business and the British government’s plans to limit compensation for road accidents.
The 2017 annual results released overnight show the law firm with negative operating cash flow of $39.1 million and revenue of $611.5 million, down from $908.2 million the year before.
The company’s lenders have agreed to increase a $40 million working capital facility by another $50 million.
The company’s board of directors, including chair John Skippen, has gone. The new board will be made up of seven directors, including four from Anchorage and three from other former lenders.
Slater and Gordon will continue to be listed on the ASX.
In August last year, the company posted an annual loss of $1.017 billion, including a $879.5 million non-cash impairment against the value of goodwill in its UK business.
The company in February recognised another $350.3 million in impairment on the UK goodwill.
In June this year, the company settled a series of class actions by disgruntled shareholders. The company’s insurers will pay $32.5 million and Slater and Gordon’s lenders, now its majority equity holders, another $4 million.