SYDNEY--A battle between two U.S.-led consortiums for control of
Billabong International Ltd. (BBG.AU) took a new twist Thursday
when the Australian surfwear company tore up an existing
refinancing deal and overhauled its top management.
Billabong said it has accepted a new funding package from
Centerbridge Partners LP and Oaktree Capital Management, backing
away from a rival rescue deal after the distressed debt investors
sweetened their original bid.
The struggling company, which recently reported a 860 million
Australian dollars (US$816 million) annual loss, had agreed to
accept a refinancing proposal from private equity firm Altamont
Capital Partners and Blackstone Group's (BX) credit arm, GSO
Capital Partners.
The new agreement involves Billabong using funding provided by
Centerbridge and Oaktree to repay the US$294 million loan it
received from the Altamont consortium. It also involves issuing new
shares and options to Centerbridge and Oaktree that will result in
the pair owning up to 40.8% of Billabong's stock.
As part of the deal, Neil Fiske, a former head of adventure-wear
company Eddie Bauer Holdings Inc., will become Billabong's new
chief executive. Mr. Bauer displaces the Altamont consortium's
choice, former Oakley Inc. boss Scott Olivet.
Centerbridge and Oaktree's bid was "significantly improved"
compared to an earlier offer, partly because it involves cheaper
funding costs. Existing Billabong shareholders will also be able to
buy A$50 million worth of new Billabong shares at 28 cents
each.
Centerbridge and Oaktree would have ended up with a greater
equity stake in company of up to 44.3% under the previous deal.
Write to Ross Kelly at ross.kelly@wsj.com
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