Billabong Shares Pick Up, Refinancing Deal Set

Gold-coast based sporting goods and surf wear company Billabong is slowly gaining shareholder confidence at the stock market.

The company opened trading yesterday at 31 cents, which quickly rose to 36.5 cents in the late morning. Its stocks finally leaped to as much as 46% when trading ended.

Signs show that Billabong is slowly gaining its hold, and investors are, once again, keen on putting their money in the company’s stocks particularly when news of its refinancing deal has been confirmed. The confirmation of this deal was announced yesterday.

Billabong has reached an agreement with the Altamont and Blackstone Group, which will be refinancing Billabong’s debts. The deal reportedly amounted to $294 Million, where part of the arrangement will include Billabong sale of its Dakine brand for $70 Million. Its current chief executive, Launa Inman, meanwhile, will also be replaced by a new head in the person of Scott Olivett. Mr. Olivett worked with the US label Oakley as its former chairman and chief executive.

Billabong, which peaked in May 2007 and was a sought-after brand, experienced a series of slumps and many failed takeover talks in the past years.

According to an analyst with regards Billabong’s standing in the market, “We expect the share price to remain volatile and there exists a very low risk that shareholders will not support this transaction, however, we suggest the share price is likely to increase, even adjusted for dilution, and hence upgrade to neutral.”