Markets: Billabong buoyancy

Altamont Capital and GE Capital have agreed to provide long-term financing to Billabong, driving the once-ailing stock higher again.

Billabong shares have continued their climb.

The stock, up 77 per cent since July 16 when private equity firm Altamont Capital Partners announced an investment and financing plan for the retailer, rose as much as 8.4 per cent today after GE Capital and Altamont said they would provide Billabong long-term credit.

GE Capital has agreed to provide a $177 million revolving credit facility to Billabong. Altamont’s $325 million bridge loan facility that was drawn down last month by Billabong to pay back debt. Billabong’s surf, skate and snowboard brand Dakine has been sold to Altamont for $70 million.

At 1535 AEST Billabong’s shares had risen 2.75 cents, or 6.6 per cent, to 44.25 cents after earlier rising as high as 45 cents.   

Altamont has also agreed to lend as much as $281 million in term loans to Billabong and buy $44 million worth of convertible notes in the company. The private equity firm’s stake in the iconic surfwear brand may grow to as much as 40.49 per cent after 9.5 years if it exercises all of its equity options associated with its financing package for Billabong.

Billabong aid in an ASX statement today that Lauran Inman left her position as chief executive and a member of the company’s board on August 2. Former Oakley chief executive Scott Olivet, nominated by Altamont to replace Inman, is working as a Billabong consultant while the company awaits the decision of the Takeovers Panel.

“Discussions with Scott Olivet regarding his appointment as CEO are continuing,” says Billabong. Peter Myers is now Billabong’s acting chief executive.

The Takeovers Panel deliberations may take another week or more, says Billabong.

Oaktree Capital and Centerbridge Partners, who are battling for control of Billabong, applied to the panel that vets acquisitions in Australia for the Takeovers Panel to force the Billabong board to put their rival financing and investment bid to shareholders. Billabong’s board has previously described Centerbridge and Oaktree’s investment and financing proposal as “not an offer capable of acceptance”.

Paul Naude, who had launched a 60 cent a share takeover bid for Billabong with private equity firm Sycamore Partners, has resigned as a director and employee of the company after a 15 year Billabong career.