EMBATTLED law firm Slater and Gordon (ASX: SGH) has secured approval for two loans totalling $72 million as it continues to try and avoid collapse.
The debt-strapped listed company has entered into an agreement with debt buyers as its new senior lenders with a capitalisation of $32 million on interest payments which are due on June 28, 2017, and a further senior debt of up to $40 million.
The terms of the loans are subject to credit approval and documentation.
"The purpose of the new facility (loan) will be to provide the Company with the working capital headroom required to continue to execute its plan to restore its financial performance," the company said in a statement to the ASX.
"The support of the new senior lenders continues to be fundamental as current levels of bank debt exceed total enterprise value."
The new agreement also includes a share buy-back program with a cash impact of less than $250,000 with a provision that no key management personnel will benefit from the buy-back.
Slater and Gordon has been in financial trouble since midway through 2015 when it acquired the UK firm Quindell, which was a disaster for the Melbourne-based firm, which has lost 98 per cent of its market cap in two years.
Last week, ASIC has cleared Slater and Gordon of deliberately falsifying its accounts relating to its spectacular share price crash after a three-month investigation.
The investigation centred on the accuracy of financial records and accounts of the company for the period between 1 December 2014 and 29 September 2015.
The group is still facing a $100 million class action from rival Maurice Blackburn in the Federal Court.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support