The Australian parent of Irvine-based Billabong USA plans to raise $228.6 million through a sale of new shares of the action-sports apparel company.
Proceeds have been tagged for a two-thirds reduction in debt, to $101.6 million.
Billabong International Ltd. is offering existing shareholders 221 million shares priced at $1.03. That will nearly double the number of shares outstanding.
Billabong founder Gordon Merchant will buy $30 million worth of new shares. Billabong lowered earnings guidance for the current fiscal year, which runs through June 30. The company said it expects $131.7 million to $136.7 million in 12-month earnings before interest, taxes, depreciation and amortization, down from its projection of $159 million.
The company also announced that Chairman Ted Kunkel will retire between October and February. Audit Committee Chair Allan McDonald also announced his retirement, effective in October.
The announcement represents the first major corporate developments since the appointment in May of Launa Inman as Billabong International’s chief executive and Irvine- based Paul Naudé as its Americas division president.
Billabong said weak sales and heavy discounts in Europe, Australia and Canada have prompted retailers to request delays on shipments. U.S. business is meeting expectations, and its Costa Mesa-based RVCA Clothing unit represents a company bright spot.
—Kari Hamanaka
