Quiksilver Gets Confirmation of Bankruptcy Reorganization Plan

by San Antonio Attorney

Quiksilver, which recently filed for bankruptcy and is currently following a reorganization plan for bankruptcy proceedings since September, finally gets confirmation by the bankruptcy court which will restructure $800 million in debt and provides an opportunity for Quiksilver to start anew under Oaktree Capital Management, a new private-equity owner.

Quiksilver is predicted to emerge in early February.

Oaktree aims to swap Quiksilver’s debt for equity and buy remaining shares that are not sold to the bond holders, thus making the Quiksilver, a private company.

Pierre Agnes, a chief executive stated that his reorganization plan is an important milestone in the evolution of the company, which also covers Roxy and DC shoes, since the court has approved of it.

David Tanner, managing director of Oaktree, expressed his interest to partner with the Quiksilver management to maintain its course of the multi-year turnaround program.

Tanner added that Quiksilver has a characteristic that most consumers from all parts of the world like.  A new strategy will provide the opportunity in focusing on the best-in-class products.

The company’s deal with Oaktree previously faced opposition from the junior bond holders, who held a $227.4 debt against them.  A solution to this problem was for Quiksilver to increase the pool of cash reserved for the low-rank creditors.

The junior bondholders were promised a ‘proposed rights offering’.  Oaktree is slated to earn more than $9 million in fees to ensure Quiksilver will raise an ample amount of funds.

In addition to the funds raised for the rights offering and another $140 million in bankruptcy-exit financing, Quiksilver aims to pay off debts using these funds and slowly emergence from bankruptcy.  The existing equity will be cancelled.  Quiksilver’s group debt will be reduced from $900 million to less than $300 million, thus giving a chance to reinvest in core brands.

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