Bankruptcy settlement closer than ever for Quiksilver

Quiksilver Inc. is reportedly close to reaching a deal with its creditors. While the surfwear brand’s senior creditor, Oaktree Capital Management LP, has agreed to pay 14 million dollars in cash as well as a small percentage of the equity in the reorganised entity.

Meanwhile, Sources close to the matter quoted by Bloomberg said that a group lower-ranking creditors said they deserved 91 million dollars based on Quiksilver’s value, according to court papers filed January, 21.

This committee argued in the filing that the retailer’s assets are worth about 690 million dollars, while the company said they’re worth about 546 million dollars.

The deal is designed to enable the company to emerge from bankruptcy under its expected time frame. The hearing to confirm Quiksilver’s restructuring is scheduled for Thursday.

Bankruptcy court’s decision, key to Quiksilver’s turnaround hopes

If the US Bankruptcy Court in Delaware agrees to a refinancing deal that will see Quiksilver’s 826 million dollars debt reduced to as little as 300 million dollars, then the iconic Australian brand will exit Chapter 11 bankruptcy. Next step is to turn into a revitalised private company owned by Oaktree.

It’s noteworthy that it was precisely Oak Tree that rescued ASX-listed Billabong in 2013, currently holding a 19.3 percent stake at Quiksilver’s direct competitor.

There are some market insiders pointing out to a potential merge of the two brands, to create a market giant within the surfwear sphere.

Quiksilver declared Chapter 11 bankruptcy in the US in September as it strained to compete against a rush of new fashion labels and changing consumer ­tastes. Its businesses in Europe and the Asia-Pacific, including Australia, were not part of last year’s bankruptcy filing.

Oaktree holds about 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, according to the plan, reports ‘The Australian’.