Billabong: new deal and new CEO

The struggling Australian surfwear company Billabong has once more accepted help in form of a refinancing plan, this time from New York-based Centerbridge Partners and Los Angeles-based Oaktree Capital Management, together known as C/O

Consortium. In July, Billabong had announced a deal with private equity firm Altamont Capital Partners and GSO Capital Partners that included a bridge loan for 294 million dollars.

The new agreement gives Billabong a longer-term debt at a lower interest rate, namely 360 million dollars for six years and a fixed interest rate of 11.9 percent, compared to the earlier terms of a 275-million-dollar-loan with a 15 percent interest rate plus a 35-million-dollar- loan at a 10 percent interst rate, both for five years, which Billabong will have to repay now.

Billabong looking for long-term financial security

According to a statement released by Billabong yesterday, the agreement meets the company’s “need for immediate long-term funding certainty and a strong financial base”. Upon announcing the news, Billabong’s shares rose by 6.7 percent to 0.48 Australian dollars; the highest level in more than two weeks.

The surfwear company has also appointed a new chief executive officer, Neil Fiske who most recently worked as a senior retail adviser at Canadian private equity firm Onex. Before that, he was chief executive at the US outdoor clothing store chain Eddie Bauer.

‘‘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 (chief executive officer) in retail and the active outdoor category,’’ said Billabong in a statement, adding that Fiske had a proven record of turning around companies that had been struggling.

The Australian surfwear company was worth almost 4 billion Australian dollars (3.8 billion US dollars) at its prime in 2007 but has now fallen to a market value of just 216 million Australian dollars (205 million US dollars). It has been struggling in view of competition from major chains and a consumer spending slump, thus having to tackle takeover and refinancing offers for more than a year since May 2012.