Billabong International Limited’s fifth largest investor is trying to oust most of the Australian surf wear company’s board of directors and amend its bylaws to require shareholder approval of refinancing deals
Besides Billabong, the company's brands include Element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf, Xcel, Tigerlily, Sector 9, Dakine and RVCA brands. It also owns Canada's West 49 chain.
Coastal Capital International Ltd., which has a 5 percent stake in Billabong, had asked for a shareholder meeting to vote on resolutions including an amendment to Billabong’s constitution so that future debt or equity financing plans are subject to a shareholder vote. It also wants representatives on Billabong’s seven-person board and to have all directors removed except founder Gordon Merchant and his long-time friend Colette Paull.
Billabong’s full-year losses tripled to A$860 million and the company’s 40-year-old namesake brand was written off to a zero valuation in annual results announced last week. Management have accepted a bridging loan from Altamont Capital Partners to refinance its debt and are studying a separate proposal from a group including Oaktree Capital Management LP and Centerbridge Partners LP.
The Coastal Capital action isn’t expected to “cause any delay or deferral of the company’s process to complete the long term financing”, Billabong said in the statement.