The market isn’t exactly responding joyously to Quiksilver’s recent Q3 forecast and financial restructuring plans. The stock was trading down 21 percent this morning to $2.83 a share after the company’s recent plans emerged, according to a story in the Wall Street Journal.
. . . it [Quiksilver] secured financing from private equity firm Rhone in the form of a five-year, $150 million loan to help stabilize its liquidity position. Quiksilver, which has been exploring strategic and financing alternatives, relies on short-term and uncommitted funding. . . Under the deal, Quiksilver will name two board members designated by Rhone. . . In addition, Quiksilver entered a written commitment with Bank of America Corp. (BAC) and General Electric Co.’s (GE) GE Capital, as joint lead arrangers to refinance its existing Americas facility with a new three-year, $200 million asset-based credit facility. The company is also in discussions with its French banking partners to consolidate its European debts into a multi-year facility.
According to Calpers.ca.com Rhone is a “private equity firm specializing in leveraged buy-outs of trans-Atlantic and pan-European businesses.” Guess this means Quik will cover its $55 million Euro note that comes due on June 30, 2009, but what does it mean for the future when two board members are friends of Rhone?
For his part, Kelly Slater appears to have faith in the company. Much of the compensation for this new 5-year Quik sponsorship deal comes in the form of stock, according to a story on Surfingmagazine.com.
[Link: Wall Street Journal and Surfing Magazine]
