ASA calls for Billabong delay over Oaktree, Centerbridge deal
The Australian Shareholders Association (ASA) has called on Australian surf wear company Billabong International to delay a shareholder vote on a decision that could give PE creditors Oaktree Capital Management and Centerbridge Partners as much as 40.8% of the firm.
According to The Australian, the shareholder group said it was concerned that "control of an iconic Australian company is changing hands cheaply without shareholders being given up-to-date financial information." It added that shareholders needed more information about Billabong's strategic plan and financial results.
The vote relates to a refinancing plan Billabong agreed with Oaktree and Centerbridge in September. Under the terms of the package, the Oaktree- Centerbridge consortium will lend up to A$386 million ($360 million) to the company for six years at a fixed rate of 11.9%. In return it will receive 329 million shares at A$0.41 a piece and 29.6 million options - exercisable at A$0.50 per share - which will give the consortium as much as 40.8% of the company.
The Oaktree-Centerbridge proposal beat out an earlier offer made by a consortium led by Altamont Capital partners, which also included The Blackstone Group's credit arm GSO Partners. Altamont proposed a $275 million loan with a 15% interest rate and another $35 million at a 10% rate, both with five-year terms.
The ASA's policy and engagement coordinator, Stephen Mayne, said it was unprecedented for a former ASX100 company outside the mining sector to fall into foreign hands through a heavily discounted selective placement when shareholders usually received a premium when surrendering control. Shares in Billabong last traded at A$0.65 a share.
"Before seemingly selling the company on the cheap, investors deserve to be told the December-half results which the insiders proposing this deal are presumably well across," said Mayne.
The extraordinary general meeting, where Billabong shareholders are due to vote on the refinancing plan, is scheduled for January 30.
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