Quiksilver Inc. said that it has "struck a loan and investment deal and no longer plans to sell its DC Shoes unit or other brands to deal with an epic downturn," according to Michael Lyster of the ORANGE COUNTY BUSINESS JOURNAL. France-based Rhone Group LLC is lending Quiksilver about $150M over five years to "help the company refinance a U.S. line of credit and consolidate its European debts." The deal includes "warrants for Rhone to buy about 20% of Quiksilver's shares," and Rhone also is "set to name two directors for Quiksilver's board." Quiksilver Chair & CEO Bob McKnight called the loan "the cornerstone of Quiksilver's financial restructuring plan." Quiksilver said that it is also "working with French banks to consolidate its European debts into a new credit line and 'expects a positive resolution in the near term.'" Lyster noted the loan "could be a lifesaver for Quiksilver, which is struggling under the weight" of more than $1B in debt, most from '05's "ill-fated $560[M] buy of French ski maker Rossignol, which was unloaded last year." About $315M in Quiksilver debt is "due this year and in 2010." The company "widely had been expected to sell its hot DC Shoes brand to pay off debt," but execs said that sales of "any brands are 'off the table.'" For the recently ended FY quarter, Quiksilver reported a profit of $6.6M, "which beat analysts' expectations" of $5.3M. However, sales "fell 17% from a year earlier" to $494M, versus the $502M Wall Street had expected (ORANGE COUNTY BUSINESS JOURNAL, 6/8 issue
At presstime, shares of Quiksilver were trading at $2.92, down 19.34% from yesterday's close of $3.62 (THE DAILY
SURF'S UP: Surfer Kelly Slater has inked a five-year extension of his endorsement deal with Quiksilver, and he will accept a significant portion of his compensation in the form of the company's stock (Quiksilver).