Quiksilver negotiates with banks loan for post-bankruptcy

Quiksilver Inc. is negotiating with banks for a loan that would help finance its business after it exits bankruptcy, according to two people with knowledge of the matter.

As reported by Bloomberg, Bank of America Corp. and JPMorgan Chase & Co. are among lenders discussing an asset-backed credit line for the company, said the same sources. The loan will be a revolving one valued at 125 to 150 million dollars. Additionally, the surfwear company may seek a term loan as well.

Obtaining the loan is crucial to ensuring that Huntington Beach, California-based Quiksilver gets final court approval for its growth plan after it emerges from bankruptcy. A hearing is scheduled for the end of January, and the company expects to exit court protection shortly after Judge Brendan Shannon signs off on the proposal.

Quiksilver filed for bankruptcy protection in September after years of struggling. At the time of the filing, its total debt was about 826 million dollars, which will be cut to less than 300 million dollars under a restructuring plan that will grant Oaktree Capital Management LP with the control over the retailer.

As per the restructuring plan, Oaktree – holding circa 73 percent of the chain’s 279 million dollars in senior notes - would own the company after swapping the debt and buying the remaining securities not sold in a rights offering to existing bondholders.