Billabong Seeking Up To $290 Million To Pay Down Debt

mike lewis

• May 18 2009
• 287 views
• add a comment

After temporarily halting trading of its shares on the Australian Stock Market late last week, a move that fired up speculation on the analyst front that Billabong was either going to be raising money or announcing a profit downgrade, the company announced today that the speculation was correct on both fronts.

According to Reuters:

Australian surfwear retailer Billabong International (BBG.AX) is looking to raise A$290 million ($217.6 million) to pay down debt, with a share sale priced at a 29 percent discount to its last trade.

Billabong said on Monday it was raising the money through a fully underwritten 2-for-11 rights offer to institutions, at A$7.50 a share, worth A$200 million, and a matching offer to retail shareholders, which would raise up to A$90 million.

Its shares, on a halt for the sale, closed on Friday at A$10.62. It unveiled the plan on Monday after forecasting lower full-year profit. ($1=1.333 Australian Dollar) (Reporting by Sonali Paul)