NEW YORK ( TheStreet) -- Centerbridge Partners and Oaktree Capital Management Thursday, Sept. 19, emerged as victors in a refinancing tussle at board sports clothing and equipment group Billabong International, elbowing out Altamont Capital Partners and Blackstone Group's ( BX) GSO Capital with a deal which will eventually land the successful investors up to 41% of the equity. The partners, which hold most of Gold Coast, Australia-based Billabong's senior debt, forged a binding deal with Billabong, having sweetened the terms of a previous July proposal. Their victory follows a long series of abortive takeover attempts at Billabong, starting with a February 2012 proposal by TPG Capital. As bidders came and went, series of profit warnings undermined Billabong's negotiating position. Earlier this year Billabong started work on refinancing its debt instead and in July it struck a deal-in-principle with Altamont, a one-time late-stage bidder, and GSO Capital, initially snubbing a late approach from Centerbridge and Oaktree.
In a change of plan, former Eddie Bauer Holdings CEO Neil Fiske will become managing director and CEO of the company. Billabong, Altamont and GSO had previously arranged for former Oakley CEO Scott Olivet to take the helm. Though Centerbridge and Oaktree had earlier said they were happy to go along with the original plan for the chief executive, Olivet decided he didn't want to work with the new financiers. Centerbridge's Jason Mozingo, a senior managing director, Oaktree managing director Matt Wilson and another director to be nominated by the two investors will join the Billabong board. GE Capital will remain in the mix, as envisaged under the Altamont/GSO proposal. GE Capital will provide an asset-based revolving credit facility of up to $140 million. The new debt package will give Centerbridge and Oaktree between 33.9% and 40.8% of the equity, down from the 39.7% to 44.3% they had previously sought, whereas Altamont and GSO would have held 40.5% had their July outline agreement come to fruition.
Most of the elements of the July Altamont/GSO proposal had required binding documentation but Altamont will retain options over 42.3 million Billabong shares and one board seat as a legacy of that deal. It will lose its second board seat with the repayment of the bridge loan. Billabong said in August that its full-year loss had almost tripled to A$859.5 million after it slashed the value of its eponymous brand and other labels.