Surfpolitik Billabong recovery begins with discounted shares

In: Surfpolitik by Stu Nettle 286 Comments Thu 21st Jun '12

Tags:

One month after Laura Inman took over the CEO role at Billabong the recovery process has begun. Mrs Inman has formulated a plan to begin paying off Billabong's mounting debt and stave off further takeover attempts, yet its success hinges upon the willingness of existing investors to make further outlays.

Billabong will issue new shares to existing shareholders at a 44 per cent discount to current prices. If successful this could raise an estimated $225 million which Billabong can then use to reduce its debt from $325 million to about $100 million.

"Today's capital raising is a vital step forward for Billabong," Laura Inman said in a statement today. "It not only further strengthens the balance sheet, but also assists in continuing to execute on previously announced initiatives and to execute on the transformation strategy."

Four months ago Billabong spurned a takeover approach from private equity group, TPG Capital, selling Nixon watches to cut its debt. TPG indicated it was prepared to pay as much as $3.30 a share for Billabong, the company said in February.

Billabong shares closed yesterday at $1.83 and have slumped 70 percent in the past year. The stock was halted from trading today.

More news as it breaks.

Loading Comments