California Apparel News

Beleaguered surf giant Billabong International Ltd. shifted gears in its bailout.

On Sept. 19, the Australian-headquartered company, with a division located in Irvine, Calif., scrapped a refinancing deal made in July with Altamont Capital for a deal that the company deemed superior.

The $294 million deal with Altamont would have required that Scott Olivet, former chairman of eyewear and fashion brand Oakley, would become the chief executive officer of Billabong. According to a Billabong statement, the surfwear company revised its agreement with Altamont in August. The revision said that Billabong had the right to enter into an alternative financing agreement if Billabong’s board determined it necessary to satisfy its “statutory or fiduciary duties.” Billabong will pay a fee of $5.6 million to Altamont for breaking the agreement. Olivet will not become Billabong’s CEO.

Billabong struck a deal with Centerbridge Partners L.P. and Oaktree Capital Management L.P. The agreement will allow Billabong to repay Altamont $294 million. Billabong also will retain a credit facility of up to $140 million from GE Capital.

The new deal will offer Billabong a lower cost of debt and additional upfront liquidity, according to a Billabong statement. Part of the new deal with Centerbridge and Oaktree requires that Neil Fiske will become chief executive officer and managing director of Billabong. Fiske served as chief executive officer of the Eddie Bauer fashion label from 2007 to 2012. Since then he has worked as retail and restaurant industry partner for Onex Corp., a Toronto-based private-equity investment firm.