NATIONAL: Surfwear giant Billabong weathered some rough waters on the stock market yesterday, with its share price plummeting by more than 20 per cent in the wake of a completed $230 million capital raising.
Shares fell by $2.17 to close at $8.45, a 29 per cent decline on its closing price of $10.63 last Wednesday.
The company had completed a two-for-11 offer priced at $7.50 a share, with institutional investors securing $230 million worth of new stock. Billabong planned to raise a further $60 million from retail investors.
Chief executive Derek O'Neill said the capital raising had been "strongly supported" by institutional investors.
"We are very pleased with the positive response from investors which demonstrates strong support for the company."
Billabong announced the share offer on Monday in a bid to pay down debt. It expected net profit for the year ended June 2009 to be between $160 and $165 million, down from $176.4 million in 2008.
O'Neill said there had been an "unprecedented" slump in forward orders from the US market with a 20 per cent decline in sales. Billabong planned to close 12 stores by the end of the year.