Shares of Irvine-based Billabong USA's parent continued to rise after investors sent the company's stock up during Monday trading in Australia after a U.S. hedge fund called for the removal of most of the company’s board.
Australia-based Billabong International Ltd. is traded on the Australian Securities Exchange and closed up about 1% on Tuesday in Australia, a day after rising 15% to a market value of $210.71 million.
The action-sports company makes clothes and accessories under several brands, many of them local, and also operates retail chains.
Billabong shareholder Coastal Capital International Ltd. asked that a shareholder meeting be called to consider removal of the entire board with the exception of founder Gordon Merchant and Colette Paull, one of the company’s first employees.
Coastal Capital, which has a 5% stake in the company, also suggested its own representation on the board along with shareholder approval of any future debt or equity deals for the company.
Billabong said in a statement released Sunday that its board was reviewing the request.
This latest twist at the troubled action sports apparel maker comes as the company's board attempts to work out a long-term financing deal with a group led by Palo Alto private equity firm Altamont Capital. There’s also a separate, competing financing offer on the table from U.S. hedge funds Centerbridge Partners LP and Oaktree Capital Management LP.
Billabong said in its statement that this latest turn of events is not expected to delay the company's ability to work out a financing deal.
Closing a deal is crucial for Billabong after an extended period of uncertainty that has seen management changes, brand sales and losses amid attempts to affect a turnaround plan now a year in the making.
Billabong posted a $776.04 million net loss for the year ended June 30. Companywide sales fell 5.9% in constant currency to $1.21 billion.