Orange County Business Journal

Billabong Shares Plunge 47.5%

Kari Hamanaka Monday, June 25, 2012

Shares of Irvine-based Billabong USA’s Australian parent fell 47.5% today to 96 cents per share at market close, an apparent reaction to a new outlook and plan to raise capital announced last week.

Billabong International Ltd. said it raised $155.1 million through the sale of new shares to existing stockholders last week.

The sales represented 79% of a total of 221 million shares, priced at $1.03 per share, that Billabong put up for sale.

The remaining shares will be offered to the public beginning Friday. Billabong hopes to raise $228.6 million, which would be used reduce its debt by about two-thirds, to $101.6 million.

Billabong sells action sports-inspired clothes, shoes and accessories under its namesake brand in addition to RVCA, Honolua, Element, Von Zipper and others.

Business for Billabong has worsened since its February half-year update as a result of weak consumer confidence and heavy retail discounting in Australia and Europe, the company said.

Billabong's wholesale and retail business in Canada has also performed below expectations, according to the company.

The business update resulted in the company lowering its previous guidance for the 12 months through June of $159 million in expected earnings before interest, taxes, depreciation and amortization. Billabong said it now expects EBITDA between $131.7 million and $136.7 million.

The company is expected to reveal a turnaround strategy in August.