Stormy conditions settling at Billabong
The rolling tide that is Australian surfwear company Billabong seems to have landed on new shores, settling on a finance deal and new chief executive for the label.
The embattled clothing company has struck a new long-term refinancing deal with affiliates of Centerbridge Partners and Oaktree Capital Management - together known as the C/O Consortium - to recapitalise the company.
Billabong will face the new day with the appointment of Neil Fiske to the top job. Mr Fiske comes from a senior retail advisory role with Canadian private equity firm Onex. He is also a former chief executive at clothing and equipment company Eddie Bauer.
The deals gave Billabong shares a nice bump, closing on Thursday up 5.6 per cent at 47.5 cents. The company has welcomed its new chief in a statement saying: “Mr Fiske is a proven and industry-respected executive who brings to Billabong a strong combination of world-class strategy and successful execution experience as a CEO in retail and the active outdoor category.”
The company says it is looking forward to tackling its refinancing challenges on the road to stability. Reports say the deal includes a six-year loan of $386 million; a $135 million equity placement to the C/O Consortium; a $50 million rights issue available to shareholders other than the C/O Consortium; and 29.6 million options issued to the C/O Consortium exercisable at 50 cents per share.
Through the agreement Billabong will be able to repay an existing $315 million bridge loan facility from the Altamont Consortium, which was struck in July 2013.
The surfwear brand has had a rough set in the last year or so, fighting to stay afloat amidst a sea of lesser offers and calls for the executive board to be wiped-out and waxed-over.