Billabong drops Altamont for Oaktree, Centerbridge rescue

According to a filing, the new agreement provides the beleaguered firm - which recently saw the value of its namesake brand wiped out - with a longer-term debt at a lower interest rate, and allows it to repay a $294 million bridging loan from the group led by Altamont Capital Partners.

Under the terms of the package, Oaktree and Centerbridge will lend up to $360 million to the surfwear company for six years at a fixed rate of 11.9%. It also involves issuing new shares and options to Oaktree and Centerbridge that will result in the pair owning up to 40.8% of Billabong's stock.

Ian Pollard, chairman of Billabong, said the new proposal was "significantly improved" compared to a previous proposal by the pair which had been rebuffed back in July, partly because of the cheap funding costs.

By contrast, the Altamont consortium, which also included Blackstone Group's credit arm GSO Partners, had announced a revised agreement on August 21 which would have provided a $275 million loan with a 15% interest rate and another $35 million at a 10%, both with five-year terms.

The consortium had been forced to restructure its offer in August after Oaktree and Centerbridge filed a complaint with Australia's Takeovers Panel. The pair -which had bought the majority of Billabong's debt from a bank syndicate earlier back in July at 10-20% discount of face value - came back with a competing offer the same week.

In addition, the company has named Neil Fiske, former head of adventure-wear company Eddie Bauer, as its new chief executive officer and managing director. He displaces the Altamont consortium's choice - former Oakley boss Scott Olivet.

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• Topics
• Australasia
• Consumer
• Financing
• Altamont Capital
• The Blackstone Group
• Oaktree Capital
• Centerbridge Capital Partners
• Australia
• Consumer
• GSO Capital Partners
• Distress