SYDNEY — Surfwear company Billabong said Thursday that it has entered binding agreements with the hedge funds Centerbridge Partners and Oaktree Capital Management for a longterm refinancing package and ditched its previously announced refinancing deal with Altamont Consortium.
The deal promises to deliver the American investors an up to 40.8 percent stake in Billabong. It’s also the latest twist in ongoing saga over the future of the financially troubled Australian surf company.
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According to the statement, the new Centerbridge/Oaktree deal will “provide Billabong with a stronger balance sheet and capital structure to allow it to stabilize the business, address its cost structure, and pursue a strategy to grow the business.”
The agreements will enable Billabong to repay in full its existing $294 million bridge loan facility from the Altamont Consortium, that was entered into on July 16 — three days before Centerbridge and Oaktree referred the deal to the Australian Takeovers Panel, which ultimately found several components to be anti-competitive and forced revisions.
The new Centerbridge/Oaktree deal includes a six year senior secured loan of $360 million; a 135 million Australian dollar ($127 million at current exchange) equity placement to the Centerbridge/Oaktree Consortium and, following the placement, a 50 million Australian dollar ($47 million) non-underwritten, renounceable rights issue available only to shareholders other than the Centerbridge/Oaktree Consortium.
According to the statement, after the financial operations, Centerbridge/Oaktree will own between 33.9 and 40.8 percent of Billabong’s fully-diluted share capital.
Billabong will retain the previously-announced GE Capital asset-backed multi-currency revolving credit facility of up to $140 million.
Neil Fiske, a retail adviser to Canadian private equity firm Onex and the former chief executive officer of Eddie Bauer and Bath and Body Works, has been appointed as ceo and managing director of Billabong.