Billabong strikes sweetened long-term refinancing deal, appoints new CEO
19 Sep 2013
Struggling Australian surfwear company Billabong International Ltd yesterday struck a sweetened long-term refinancing deal with a consortium of US hedge funds, and appointed a new chief executive.
The long-term refinancing deal that has been struck with Oaktree Capital Management and Centerbridge Partners, includes a six-year loan of $386 million, a $135 million equity placement to the consortium, a $50 million rights issue available to shareholders, and 29.6 million options issued to the consortium exercisable at 50 cents per share.
The proceeds of the equity placement to the consortium and the rights issue to other shareholders will be used to repay up to $185 million of the new-term debt.
The current deal will allow Billabong to repay an existing $315 million bridge loan facility from the Altamont Consortium, which was signed in July 2013.
In addition to this financing, Billabong said that it will retain the previously announced commitment from GE Capital to provide an asset-based multi-currency revolving credit facility of up to $140 million.
As part of the deal, the consortium will be allowed to nominate three representatives to the board of Billabong.
The Queensland-based company also announced that it has appointed Neil Fiske as CEO and managing director of Billabong.
''In fully evaluating the competing refinancing proposals, on a range of factors, the Board determined that the Consortium proposal was in the best interests of the company, its shareholders, its employees and other key Billabong stakeholders, on both economic terms and in providing near term certainty,'' said Billabong chairman, Dr. Ian Pollard.
''As Billabong continues to restructure its operations globally, the need for immediate long-term funding certainty and a strong financial base from which to reinvigorate an iconic group of brands is best met by entering into this agreement now,'' he added.
