Quiksilver Plans to Go Private Post-Bankruptcy

by San Antonio Attorney

Oaktree Capital Management is predicted to own 90 percent of shares of the recently bankrupt Quiksilver and will take the company as a private entity if the court will approve a $600 million dollar refinancing proposal.

Oaktree Capital also owns 18.7 percent of Billabong International, Quiksilver’s rival after a refinancing program two years ago.  They are also rumored to consider a merger of the two retailers, who are both, popular in the sports market as a turnaround plan projected for longevity.

Quiksilver was established almost 50 years ago when Alan Green and John Law, created board shorts in their own garage.  The company is now based in Southern California and is listed under the New York Stock Exchange.

Though the company flourished and reached its net worth of more than 2 billion dollars, it has experience financial troubles due to increased debt and failed acquisitions.  Quiksilver currently holds a US $ 309 million loss after sales declined from last year.

The group debt will be reduced to less than US $ 300 million under a refinancing proposal.

Oaktree intends to swap debt for equity and buy remaining shares not available to existing bond holders.

Quiksilver’s other branches in Asia-Pacific and Europe has been running normally and is not part of the bankruptcy filing.

Should this potential merger of Billabong and Quiksilver take place, this will pull up Billabong’s shares as well.

However, Billabong also experiences financial troubles due to a failed share consolidation.  Stocks, which were trading initially at $2.50 after consolidation, dipped to ‘9 cents to $1.56 dollars’ last Wednesday.

Gordon Merchant, Billabong’s founder, has been snapping shares in order to restore stake of more than 12 percent.

A merge of two retailers can still be possible due to benefits of synergy and cost effectiveness, according to Australian analysts.

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