US hedge funds eyeing Billabong control: report

Centerbridge Partners and Oaktree Capital Management have taken control of all Billabong International Ltd's loans, meaning the future of the embattled surfwear retailer will liklely rest in the hands of the United States hedge funds, The Australian Financial Review reports.

According to newspaper, sources report all seven of Billabong's original lenders had ceased ties with the emabattled group, following the reported departures of Bank of America and Societe Generale yesterday.

A report from insolvency specialist McGrathNicol had previously seen Westpac Banking Corp Ltd, Commonwealth Bank of Australia Ltd, National Australia Bank Ltd and Australia and New Zealand Banking Group Ltd all sell their exposures.

The AFR reports the hedge funds are tipped to push to convert their loans into equity in Billabong and take control of the group.

For more on hedge funds, see Chris Gosselin's Clipping the hedge fund investing myths.