SLATER and Gordon boss Andrew Grech has stepped down and a board cleanout is underway as part of a major restructuring process that gives control to its lenders.
Under a binding recapitalisation agreement, Slater and Gordon's (ASX: SGH) lenders will gain approximately 95 per cent of the company's equity, enabling them to appoint a whole new board with Grech also out of the picture.
All existing directors will resign but Grech will remain a non-executive director of the company temporarily until a replacement can be found.
Hayden Stephens, CEO Australia, and Ken Fowlie, CEO UK, will continue to lead Slater and Gordon in Australia and the UK.
The recapitalisation agreement is between Slater and Gordon and its lenders, led by Anchorage Capital, who represent over 75 per cent of its secured debt by value and over 50 per cent of the number of secured lenders.
The new lending group have provided Slater and Gordon with additional support in the form of a $40 million working capital facility.
Additionally, a $5 million secured debt facility will be provided by the group of lenders which will be underwritten by Anchorage Capital.
Slater and Gordon is currently facing two shareholder class action proceedings and has notified shareholders of a third potential class action proceeding by former and existing shareholders.
Slater and Gordon Limited (ASX: SGH) is currently trading down 3.26 per cent to $0.09 as of midday today. Its shares traded at around $8.00 two years ago.
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