Slater and Gordon says its new creditors plan to restructure the legal firm and enter into binding agreements to reset its debt structure.
The struggling law firm says more than 94 per cent of its debt, which is larger than the firm's vastly diminished value, has recently been offloaded to secondary debt buyers.
The new creditors have told Slaters they want to ensure the business has sustainable debt and a stable platform for its future operations both in Australia and the UK.
"The company and new senior lenders believe a restructure by a debt for equity lender scheme of arrangement is in the best interests of all stakeholders," Slater and Gordon said in a statement.
The law firm is going through a tough period, posting a $1 billion loss in 2015/16 after writedowns of $880 million, mostly related to its troubled UK unit.
Slater and Gordon is also being probed by the Australian Securities and Investment Commission which is trying to determine whether the firm deliberately falsified or manipulated its financial records between December 1, 2014 and September 29, 2015.
Slater and Gordon shares were up 4.1 cents, or 46 per cent, at 13 cents in the first hour of trade on Friday.
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