After more than 18 months of struggling to stay afloat, Australian surfing brand Billabong has managed to secure a vital refinancing deal. With it comes a new CEO, who needs to steer the retailer into calmer waters.
American hedge funds to the rescue
The Australian fashion group announced really disastrous year results last August, but has managed to end a tumultuous search for a much-needed funding deal succesfully. Despite earlier agreements with Altamont Capital, Billabong’s management takes on American hedge funds Oaktree and Centerbridge as partners.
"In fully evaluating the competing refinancing proposals, the board determined that the Oaktree/Centerbridge Consortium proposal was in the best interests of the company, its shareholders, its employees and other key Billabong stakeholders", said chairman Pollard.
The deal provides Billabong with a 360 million dollar loan (266 million euro), sufficient to pay back its Altamont loan of 315 million Australian dollars (245 million euro). On top of this loan comes a 135 million Australian dollar (95 million euro) investment.
Fourth CEO in a year
The hedge funds are getting something in return though, with 29.6 million shares exercisable at 0.34 euro per share. The consortium has also appointed a new CEO, Neil Fiske, who is described as a "a passionate outdoorsman with a proven record of turnrounds".
Previously, Fiske worked as a CEO for American outdoor retailer Eddie Bauer and as retailing advisor for Canadian investment firm Onex. He has now become Billabong’s fourth CEO in a year. This first piece of good news in a long time fired up investors enthusiastically as the Billabong-share immediately shot up 5.6 %.