US hedge fund Coastal buys Billabong stake

Coastal Capital International snares 5% stake in troubled retailer, two years after push to derail Alinta restructure.

Upstart New York-based hedge fund Coastal Capital International has bought a 5% stake in Billabong International, two years after it attempted to derail the $2 billion restructure of Alinta Energy. 

The small fund was announced as a substantial shareholder on the retailer's share register today. 

The move comes as Billabong awaits the green light from the Takeovers Panel for its debt-for-equity swap with US private equity firms Altamont Consortium and GE Capital, after a challenge from two spurned US hedge funds. 

Hedge funds Centerbridge Partners and Oaktree Capital launched a challenge with the Takeovers Panel against the refinancing deal the private equity firms struck with Billabong  this week, arguing it was anti-competitive and coercive. 

In March 2011, Coastal Capital International attempted to derail a TPG-led $2 billion debt-for-equity deal for Alinta Energy.

The fund had bought up Alinta's stapled securities and threatened to vote against the deleveraging debt-to-equity restructure of the group, unless pushing for security holders to receive a much greater payout.