|Australia's battered Billabong nearly worthless
Embattled Australian surfwear brand Billabong, created in 1973 by Gordon and Rena Merchant, reported a A$859.5 million (US$771.7 million) net annual loss – triple the firm's market value.
Analysts said the company is nearly worthless.
Billabong said the record loss came after a 13.5 percent plunge in global sales revenues to A$1.34 billion and A$604.3 million in writedowns.
Chairman Ian Pollard said it had been “the most challenging period in the company's history'' with 158 of its stores shutting down, a sell-off of the DaKine brand and the restructuring of Nixon which Billabong said it now valued at nil.
Earnings were A$72.6 million, in line with guidance of A$67-A$74 million offered two months ago and 16.4 percent lower than the previous year.
Billabong's shares closed 5.31 percent lower at 53.5 cents.
Pollard said the company had entered a US$470 million refinancing deal with US private investment firm Altamont Capital partners and GSO Capital partners, including a five-year US$310 million loan, a share issue and an asset-based credit facility from GE Capital.
The company was also weighing an alternative refinancing proposal, received last week from US hedge funds Centerbridge and Oaktree, and intended to finalize its plans “as soon as practical'', Billabong said.
“We are nearing the end of a very long process that has caused distraction, impacted on staff morale and has been very costly,'' said Pollard.
“Liquidity has been secured and we are within weeks of finalizing our long-term funding arrangements,'' he added.
“The company looks forward to refocusing, reinvigorating its brands and rebuilding the business on a solid, long-term financial footing.''
Lucas said the results illustrated why successive takeover attempts had lapsed and banks had lost interest in Billabong, leaving only distressed equity firms to pursue a deal.—AFP