THE NEWS WRAP: Billabong strikes $395 million private equity deal

Billabong has struck a deal worth $395 million in total with US private equity firms Altamont and Blackstone, with Launa Inman set to be replaced by former Oakley chairman Scott Olivet.

 

The complicated deal will see Altamont and Blackstone group lend $325 million as part of a bridging loan and five-year debt facility, with Altamont paying an additional $70 million for adventure sports brand Dakine.

 

The deal will see Billabong repay its $289 million syndicated debt facility in full and gain an additional $106 million in working capital.

 

In return, Billabong will pay Altamont 12% interest on the loan along with 42 million share options, which if exercised will see the private equity firm own between 36.3% and 40.5% of the surfwear company.

 

Etihad increases stake in Virgin Australia

 

Etihad Airways chief executive James Hogan has revealed his airline has been buying shares in Virgin Australia, after receiving permission from the Foreign Investment Review Board to lift its stake from 10% to 19.9%.

 

Aside from the 13% stake held by Richard Branson’s Virgin Group, other key shareholders include Air New Zealand at 23% and Singapore Airlines at 19.9%.

 

“We fully support [Virgin Australia chief executive] John Borghetti and his management. We have a great relationship with Air New Zealand and we have an amicable relationship with Singapore. While we don’t code-share on passenger routes, we code-share on cargo. This is about our options and we continue to work through that,” Hogan says.

 

ASIC forces Commonwealth Bank and HSBC to change “potentially misleading” ads

 

The Australian Securities and Investments Commission has forced the Commonwealth Bank and HSBC Australia to change “potentially misleading” advertising presenting complex protected loan and structured financial products as being simpler and less risky than they actually are.

 

“HSBC claimed that its structured products were suitable for ‘traditional deposit investors looking for a way to enhance their returns through exposure to financial markets, but are unwilling to put their capital at risk should the market not perform as expected’,” ASIC says.

 

“[But] this statement was inappropriate and potentially misleading due to the risk of capital loss with certain [of the] HSBC structured products being promoted.”

 

Overnight

 

The Dow Jones Industrial Average is down .21% to 15451.85. The Aussie dollar is down to US92.43 cents.

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