The United States investment firm behind surf label Billabong is set to take control of rival Quiksilver. The Company also requested various forms of “first day” relief from the Bankruptcy Court to ease the US subsidiaries’ transition into chapter 11 and protect its stakeholders and customers.
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Bloomberg said QuickSilver had been trying to attract bidders for a management-led buyout, ideally outside of a bankruptcy.
The chapter 11 filing, supported by 73 percent of the company’s senior most class of debt, will facilitate Quiksilver’s financial and operational restructuring to restore the company to long-term financial health.
Oaktree, based in Los Angeles, already has a connection to the surfwear industry. The firm, together with Centerbridge Partners, is the largest backer of Billabong global Ltd, the Australian brand.
Quiksilver’s shares had lost almost 80 per cent of their value this year through Tuesday’s close of 45 cents.
Quiksilver’s stock price fell so low that the New York Stock Exchange threatened to delist the company in July.
Founded in 1969, Quiksilver sells gear like wetsuits and helmets, as well as clothing aimed at “mountain and ocean lovers”.
It is understood the deal would not affect the profitable Australian operations, including its stores and brands.
Quiksilver, which has its origins in the Victorian surfing town of Torquay, suffered a 13 per cent fall in sales in 2014 and posted a loss of $US309 million.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as the Company’s legal advisor, FTI Consulting, Inc.as its restructuring advisor, and Peter J. Solomon Company as its investment banker.
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The company plans to continue with a store- closing effort after filing for bankruptcy, according to one of the people.
