death of billabong?, page-81

There's speculation that covenants on debt built up on an expansion path that saw Billabong build a stable of board sport brands and a retailing network here, in the United States and in Europe will be tested if trading conditions stay as bad as they are. But even if that occurs, the covenants will surely be renegotiated, and not allowed to ignite a funeral fire.

Ahead of the downgrade, the market had expected Billabong to earn about $220 million before interest, tax depreciation and amortisation this financial year. The downgrade points to an EBITDA of around $175 million, but this would still only put Billabong's $600 million debt load on a multiple of just over 3 times EBITDA - high enough to force steps to ease the balance sheet pressure, but not high enough to torch the company.



Read more: http://www.smh.com.au/business/billabong-needs-to-perform-a-tight-juggling-act-20111220-1p3xc.html#ixzz1h8oYDtW0