Billabong considering new deal

The board of troubled clothing retailer, Billabong, is considering a rival refinancing proposal to the deal it recently reached with a US private equity firm. Resource-11

The company plans to take a loan of $US300 million from a consortium led by Altamont to help stabilise its business, overhaul its cost structure and pursue a profitable growth strategy.

Altamont will in turn take a large stake in Billabong, which made a loss of more than $500 million in the first half of the 2012/13 financial year.

The value of the company has also plunged by about 90 per cent in the past few years.

But two US hedge funds, Centerbridge and Oaktree, have approached Billabong’s board with their own recapitalisation plan, which they say provides Billabong with greater flexibility to address its financial problems.

Centerbridge and Oaktree have offered to pay more than Altamont for a stake in Billabong, and say they will charge a lower interest rate on its loan to the retailer.
“Billabong confirms that the board is considering the proposal and as part of its consideration the board met with the Centerbridge/Oaktree consortium,” the retailer said on Friday.

The company wants to finalise a financing package as soon as practical, it said.

Billabong shares gained 3.75 cents, or 6.8 per cent, to 58.75 cents.

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