SGH debt trades at 38 cents in the dollar, page-74

for some that cany get past the pay wall



No-one in the market wants to have much to do with law firm Slater & Gordon just at the minute.

So you could excuse debt traders for having sweaty palms when the first slice of debt to change hands in the ambulance-chasing firm since its big fall from grace traded at just 38¢ in the dollar, as first reported by Street Talk.
It's understood Citigroup sold in a trade handled by Bank of America Merrill Lynch last month. The debt was bought on behalf of an unnamed syndicate.
Citi was one of the key lenders and advisers to Slater & Gordon on its disastrous purchase of UK group Quindell's professional services business in March 2015, of which $879 million of the value was written off within 12 months.  
The failed United Kingdom foray has left Slater & Gordon with $682 million of net debt – which if valued at 38¢, implies the law firm has an enterprise value of about $422 million.
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Needless to say, it appears some of the lenders aren't ascribing any value to the equity of the business.  

As of Monday's close Slater & Gordon shares changed hands at 36¢ per share. That implies a market capitalisation of $123 million.
In May, Slater & Gordon negotiated an agreement with its lenders to repay its outstanding debt over three years. The terms included increased reporting to the lending group, semi-annual amortisations of debt payments and a halt in dividend payments.
The law firm's two largest lenders are National Australia Bank and Westpac and disclosures suggested that both lenders had made significant provisions against their exposures. Macquarie was the other major lender in the syndicate, along with Barclays and Royal Bank of Scotland, according to reports at the time of the debt raising. Citi and Macquarie led the $890 million capital raising in April 2015 to finance the Quindell acquisition.
Managing director Andrew Grech and chairman John Skippen fronted angry shareholders – most of them individual shareholders - at the annual general meeting on Friday telling them that "group cash flow performance remains challenging" as it focuses on repaying all its debt.
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Short-sellers are still targeting the company with 24 million shares, or about 7 per cent of the total shares outstanding, loaned out to speculators.
The company is also the subject of a $250 million shareholder class action brought against it by its rival Maurice Blackburn.
























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