The Australian surfwear company, Billabong International Ltd has reached a point of no return as it breached debt payment terms. It was forced to suspend share trading in order to undertake discussions as to possible financial options after the exclusivity period of a bidder had lapsed.
In a statement to regulatory authorities, the company needed to put trading on hold in order to 'progress discussions with interested parties.' The Gold Coast, Australia based firm had just confirmed the exclusivity period for a Aus$287 million or US$292 million bid made by Sycamore Partners Management had ended. Another possible option was Altamont Capital Partners.
According to Credit Suisse Group AG, UBS AG and the Commonwealth Bank of Australia are all in agreement that there may be a need to infuse more capital funding from shareholders as the current share values are at Aus$0.455 per share.
The company was also decrying the contined decline in sales for the last two years. It is now opting to post 80% of its total assets and 85% of earnings as security to lenders after its breach of debt terms.
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