Billabong seals the deal… finally


BillabongStruggling surfwear retailer, Billabong International, has appointed a new CEO and struck a long term refinancing deal.

Billabong has appointed Neil Fiske to the company’s top job.

Fiske was most recently a senior retail adviser to Canadian private equity firm, Onex, and is a former CEO at US outdoor clothing retailer, Eddie Bauer.

Billabong says Fiske has a proven record of turning around companies that had been struggling.

“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,” Billabong said.

Billabong has entered into agreements with affiliates of Centerbridge Partners and Oaktree Capital Management, together known as the C/O Consortium, to recapitalise the company.

It says the long term refinancing will allow the company to stabilise its business, address its cost structure and grow the business.

The agreements include a six year loan of $386 million (referred to as the new term debt); 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.

The proceeds of the equity placement to the C/O Consortium and the rights issue to other shareholders will be used to repay up to $185 million of the new-term debt.

The agreements enable Billabong to repay an existing $315 million bridge loan facility from the Altamont Consortium, which was struck in July 2013.

The C/O Consortium initially will be allowed three representatives on the board of Billabong to reflect its significant investment in Billabong.

The number of C/O Consortium representatives will later be reduced to two as the Billabong board is made smaller.

Billabong chairman, Ian Pollard, says the refinancing agreement with C/O Consortium was superior to a prior refinancing proposal put by C/O Consortium and superior to a long-term term refinancing proposal from Altamont.

Billabong also referred to an earlier request from US hedge fund, Coastal Capital International, requesting that the directors convene a special meeting of shareholders to consider a spill of Billabong’s board.

Billabong said it was seeking to have the resolutions that are subject to the Coastal Capital request put to the 2013 annual general meeting in November rather than have a separate meeting.

Shares in Billabong were three cents higher at 48 cents at 1119 AEST.


Feb 2012 – US private equity firm TPG makes two takeover offers but both rejected by the board

Jun – $225 million capital raising move wipes one-third off value of shares

Jul – TPG returns with increased takeover offer, Billabong says too low but begins negotiations

Sep – Bain Capital lodges rival takeover offer, but then withdraws

Oct – TPG withdraws offer

Dec – Former board member Paul Naude and private equity group Sycamore Partners lodge new, lower takeover offer

Jan 2013 – US private equity firm Altamont Capital Partners and retailer VF Corporation launch takeover offer

Feb – Billabong posts $537m loss for six months to December 31, downgrades full year earnings forecast

April – Sycamore and Paul Naude reduce their offer

Jun – Shares almost halve in value as takeover talks end with no deal

Jul – Reaches refinancing deal with Altamont, Launa Inman steps down as CEO

Aug – Receives a rival refinancing deal from US hedge funds Centerbridge and Oaktree, posts $860m full year loss

Sep 2 – US shareholder Coastal Capital calls for spill of the board

Sep 19 – Exits Altamont deal in favour of Centerbridge and Oaktree offer


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