GOLD COAST, Australia — Billabong International Ltd., the unprofitable Australian surfwear company, accepted a refinancing proposal from a group including Oaktree Capital Management LP and Centerbridge Partners LP, saying it offered better terms than a rival plan to repay debt.
The agreement will allow Billabong to pay back a $294 million bridge loan from a consortium including Altamont Capital Partners, which had made the rival proposal, the Gold Coast, Australia-based retailer said in a statement today. The plan includes a six-year loan of $360 million, Billabong said.
Worth almost A$4 billion ($3.8 billion) at its peak in 2007, Billabong’s market value has tumbled to just A$216 million and the company said last month its 40-year-old surf brand was worthless. Billabong, which has struggled amid competition from major chains and a consumer spending slump, has fielded takeover or refinancing offers almost constantly since May 2012.
The agreement meets Billabong’s “need for immediate long-term funding certainty and a strong financial base,” the company said in today’s statement. Billabong named Neil Fiske as its new chief executive officer and managing director.
Formed in 1973 by surfer Gordon Merchant, Billabong said last month its annual losses tripled to A$860 million following store closures, firings and a breach of debt terms.
Today’s agreement also includes a A$135 million equity placement to the consortium, Billabong said.
By Angus Whitley; Editor: Edward Johnson