re: Ann: Refinancing of Debts, Sale of DaKine...
Not sure if this has been posted, if so disregards... Jul 16, 2013 Asia
Citi Upgrades Billabong After Altamont, Blackstone Deal
By Gillian Tan Citigroup Inc. C +0.04% has upgraded Billabong International Ltd. BBG.AU +44.00% to Buy from Neutral after a consortium comprising Californian private-equity firm Altamont Capital Partners and Blackstone Group LP's BX -1.44% credit arm, GSO Capital Partners, threw the beleaguered Australian retailer a financial lifeline.
The consortium will provide a bridge loan of US$294 million, which will enable Billabong to repay debt.
“We have never had concern with Billabong’s brand potential, but have been concerned about solvency. We believe that risk is now greatly diminished,” Citi analyst Craig Woolford told clients in a note Wednesday.
“It will be a difficult journey and there are no quick fixes, but the board has avoided insolvency with an improved management team in our view,” he added, referring to the company’s new chief executive Scott Olivet, a retail veteran who spent more than a decade as a consultant at Bain & Co.
—Bloomberg News Mr. Olivet has also been chairman and chief executive of sunglass-maker Oakley Inc., and he led the group’s US$2.1 billion sale to Luxottica LUX.MI -1.63% in 2007. He has also been a vice president at Nike Inc. NKE -1.03%, with responsibility for subsidiaries like Hurley and Converse. Before that, Mr. Olivet spent 13 years at The Gap Inc. GPS -0.45%, which included oversight of real estate, store design and construction for brands including The Gap, Banana Republic and Old Navy.
The broker pointed out one of Mr. Olivet’s current directorships, at headphone-maker Skullcandy Inc. SKUL +1.98%, could present a conflict of interest, as it competes directly with Billabong’s accessories brand Nixon.
Citi also lifted its price target on Billabong by 32% to A$0.33. Shares traded at A$0.25 prior to Billabong requesting a trading halt Tuesday ahead of the announcement and soared as much as 42% to A$0.355 early Wednesday.
