Shares in Slater and Gordon jumped after it reported that corporate regulator ASIC has decided to take no action against the troubled law firm.
A short time ago, the shares were up 22% to $0.135.
ASIC (Australian Securities and Investments Commission) had been investigating the company over the accuracy of financial records and whether they were deliberately falsified or manipulated.
Slater and Gordon said today in a notice to the ASX: “ASIC has stated in its correspondence that the information and evidence available to it following its investigation does not indicate that there was a breach of law and it will not take any enforcement action.”
The law firm is about to have new owners. Most of its debt 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.
In 2015 the shares hit a high of $8.07, valuing the company at $2.8 billion, but have since been on steep slide because of its underperforming UK business and the British government plans to limit compensation for road accidents.
The company has net debt of about $680 million. The company’s market capitalisation today is about $47.5 million.
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.